Edgar Lawrence Smith

Edgar Lawrence Smith, d. June 19, 1971 at age 89, was an economist and author of the influential 1925 book Common Stocks as Long Term Investments, which promoted the then-surprising idea that stocks excel bonds in long-term yield. As The New York Times put it, the book "has laid down a principle which so reverses the accepted estimate of the relative investment value of bonds and common stocks as to have aroused the keen interest of Wall Street and investment bankers in general." In Smith's own summary for the Times, he wrote:


 * I have been unable to find any twenty-year period within which diversification of common stocks has not, in the end, shown better results, both as to income return and safety of principal, than a similar investment in bonds. It was a surprise to me, for my studies were undertaken with the intention of proving the probably future advantage to be gained from bonds over stocks.

Smith said that the "bond tradition" was supported "up to 1897, when the purchasing power of the dollar reached its highest point," but failed to take into account the fact that the dollar "is a fluctuationg measure of value."

His 1940 book ''Tides in the Affairs of Men. An Approach to the Appraisal of Economic Change'' sought to establish a connection between the pattern of economic booms and collapse and meteorological factors.