(HINT: Given the length of this quote, it may be helpful to identify and evaluate the specific claims raised by the author, and then reflect on the entire paragraph in the conclusion. Guidance on critically evaluating a statement is provided in the "Tips for Success" module on MyUni.)

"Some academics in rebutting the arguments of extreme chartists of some form or more or less automatic relationship between prices today and of sometime in the future, have gone to some lengths and used elaborate mathematical techniques to justify their belief that there is no such thing as market cycles. Though I do not understand the mathematics, I believe that they have produced extremely ingenious, logically consistent, formally attractive right answers to the wrong question in this context. The hard facts of life are that prices do move in cycles and to a considerable extent these cycles can be predicted."

Some background information: Academics have rejected the validity of charting (for investment analysis - charting relies on past price movements to predict future price changes) on the basis of statistical methods. They reject charting because they disagree with the idea that security prices experience cyclical behaviour (i.e., regular, predictable booms and busts).

Systematic evidence using large samples in various contexts suggests that security prices follow a random walk (i.e., at any point in time, with the available data set, there is a 50/50 chance that the next movement in share prices will be up or down; thus, in the absence of new information, the share price at t0 is our best estimate of price at t+1). There is systematic evidence that markets are efficient in the weak form - implying it is not possible to use past share prices to outperform the market return, on average.