Consider an hypothetical example. There is a wheel which has 2 colors painted on it , red and green on each half of the area on the wheel. When the wheel is rotated against the needle , it either stops on red area or the green area. The events that is of discussion in this example , i.e the needle being on the red area OR the green area is completely random.

If you were asked to predict the color that needle would stop, one would say probability of red = 0.5 and probability of green = 0.5. Now suppose before the experiment began , the wheel and the needle were configured in such a way that the probability of red = 0.7 and green = 0.3. Incase you do come to know of this fact ? How do you react ?

Majority of folks respond by doing the following: In 70% of the cases, they say red and spin the wheel and in 30% of the cases, they would say green and spin the wheel. What do you think is the outcome ? The probability of getting a right answer in this case = 0.7 *0.7 +0.3*0.3 = 0.59

What’s the point of the above example ?
 One needs to note that the above the folks who follow the above strategy are treating the chance component of the experiment as if it is required skill and there is a cost to this behavior. If they simply contented themselves with noticing red’s 70 percent base rate and then acknowledge that they had no influence over or intuition in to the sequence of outcomes, they could guess successfully 70% of the time by always predicting red. The probability numbers become more clear when one computes the probability that red will come up atleast once in the next four spins = 1-0.3*0.3*0.3*0.3 = > 0.99 . The probability that red will come up four times in succession = 0.7 power 4 = 24%

This is a trivial example but points to the value of acknowledging uncertainty and behaving  accordingly, may be by adopting unwavering policy

I believe that stock price is inherently unpredictable and has a uncertainty in its behavior. In the light of above example , is there not a case, of picking a random set of stocks, and just sticking ? Dont you think people would make money by passively investing in index funds than going for aggressive mutual funds ?? Some food for thought…