In 1924, Edgar Lawrence Smith published a monograph presenting evidence aimed at overturning the conventional view that equities were speculative and bonds were the only long-term investments. This was immediately so successful that such eminent commentators as Irving Fisher and Benjamin Graham agreed that the monograph had had a material impact on market psychology, playing an instrumental role in the Great Crash. In this article, we examine Smith’s approach in detail, arguing that he made significant, enduring contributions to finance theory, empirical finance, and portfolio management practice. He was influential in creating the “cult of the equity,” laid the foundations for the equity risk premium, and introduced a probability-based risk metric and equally weighted portfolios. His influence is felt nowadays not only in the methodology employed in empirical work but also in major aspects of the conventional approach to portfolio management.

中文翻译：

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EL Smith 对金融经济的持久贡献

1924 年，埃德加·劳伦斯·史密斯 (Edgar Lawrence Smith) 发表了一本专着，提供了旨在推翻股票是投机性而债券是唯一长期投资的传统观点的证据。这立即大获成功，以至于欧文·费舍尔和本杰明·格雷厄姆等著名评论员都同意该专着对市场心理产生了重大影响，在大崩盘中发挥了重要作用。在本文中，我们详细研究了史密斯的方法，认为他对金融理论、实证金融和投资组合管理实践做出了重大而持久的贡献。他在创建“股权崇拜”方面具有影响力，为股权风险溢价奠定了基础，并引入了基于概率的风险度量和等权重的投资组合。