The Value Line Investment Survey publishes weekly stock performance forecasts. Stocks are grouped into five portfolios according to expected price performance, with Group 1 comprising the most highly recommended stocks. The chart of each portfolio's actual performance over an 18-year period (Fig. Q11.8) assumes that each of the five portfolios was adjusted on a weekly basis in accordance with Value Line's stock ratings. The chart shows that the portfolios' actual Figure Qn.8 Eighteen-year record of actual forecasts assumes all rank changes have been followed. (From A. Bernhard, 'The Value Line Investment Survey," Investing in Common Stock, Arnold Bernhard and Company, Inc. © Value Line, Inc. Reprinted with permission.)

performances are consistent with Value Line's forecasts. Is this evidence against an efficient securities market?

+1600% +1400 +1200 +1600% +1400 +1200 +1000 +800 Record of Value Line rankings for timeliness Apr 16, 1965 December 28, 1983 (without allowance for changes in rank) +1000 +800 +600 Group 1+1295% +6001__ Group 2 +681% +4001-Group 3 +328% +300 Group 4 +137% +20 Group 5 +35% +100 Average +339% +400 +300 +200 +100 20 -40 60 20 60 -80 Group 1965 1966 1967 968 1969 19 1971 7 1973 1974 -17.7% 2 +189-60 +319 +263 -163 174 75 -26.2-27.8 13.6% -3.1% +39.2% +31.2% " 8.9% +26.5% +10.1% -17.1% -23.1% 8997 30.1 +21A-207 55 +122 62 7285 4 082 +2 +251 268 7 142 32 2. -336 512124 +284 259 3573 +105 29 43.1 -368 Avg 10.-79 +29.9 246 -221-75 +149 55 -27. -29.6 1965 through Group 1975 1976 1977 978 1979 98o 98 1982 1983 198 +51.6% +353% +15.8% +198% +25.6% +50.2% -1.9% +33.7% +25.2% +1295% 2 +53.0 36.3 +12.7 +16 308 +374 +07 +290 +222 681 3 529 +338 52 +92 +276 +208 +27 +255 +267 328 4 +484 +36. -02 24 +231 13.2-09 185 352 137 5 +42.1 38.2 -28 4.0 +39.9 84 -42 +199 30.0 35 Avg 1.2 +3 5.8 96 +28.0 +234 +09 +250 +27.5 339 DowJones Industrials NY. Stock Exchange Composite 39% 101% + +