Efficient-market theorists held that conventional security analysis adds no net value

Evidence

What, for example, was the point of certifying that someone had mastered the skills necessary for security analysis in the style of Graham and Dodd if the results of such analysis did not, in general, improve investment decisions? James Lorie, director of the University of Chicago’s Center for Research in Security Prices, told a reporter for the magazine Institutional Investor that money managers should “give up conventional security analysis. Its occasional triumphs are offset by its occasional disasters and on the average nothing valuable is produced” (Welles 1971, p. 58). David Goodstein, an investment manager who was a convert to the new ideas, put the same point more bluntly: `A lot of people are simply going to be put out of business. I mean, what are they really doing? What value are they adding to the process? What passes for security analysis today, in my opinion, is 150,000 percent bullshit.” — Donald MacKenzie, An Engine, Not a Camera, 351

Categorization

• XREF: Connects to the broader performativity thesis that economic theories don’t just describe markets but reshape professional practice and identity. — connects to: Practitioners read efficient-market theory as claiming investment advice has zero value — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 352; Efficient-market theory still assumed securities had intrinsic value rooted in corporate fundamentals — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 342; Market actions based on efficient-market models can create anomalies those models cannot explain — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1166 (+2 more)

Broader Connections

• Efficient-market theory still assumed securities had intrinsic value rooted in corporate fundamentals #complicates (0.85) — Donald MacKenzie, An Engine, Not a Camera, 342
• Efficient-market theory threatened brokers’ income by discouraging trading #expands (0.80) — Donald MacKenzie, An Engine, Not a Camera, 360
• Market actions based on efficient-market models can create anomalies those models cannot explain #expands (0.75) — Donald MacKenzie, An Engine, Not a Camera, 1166
• Efficient-market theory declared mechanical selling cannot move prices. #expands (0.75) — Donald MacKenzie, An Engine, Not a Camera, 808