Information is valuable and opportunistic

January 10, 2023

All types of public and private information that we encounter is valuable for someone in a particular market context. When a sender gives up information to the public (receivers) about an asset/news, that inevitably affects how the value is determined by buyers and sellers.

Insider trading is when we know information ahead of time and is illegal since the information holder has an unfair advantage over the public who lack this news.

Once information is officially public, it is legal to make a decision/action in response. If we make a decision/action and we tell everyone what we know (such as on a video online or a blog post), then it works against us in terms of gaining an advantage and/or profit unless we are trying to lie to our listeners.

If we want to profit from an asset on the market and we want to bet on it being a lower value, it makes sense for us as the senders to tell the public that they should sell more of the asset so that the probability of our bet is higher. Conversely, if we want to profit from an asset and bet on it to be a higher value, we tell the public that they should buy more of the asset, so that we increase our odds of gaining a strategic advantage.

If we unwind this entire process, we realize that it is both unfair and short-lived to rely on advantages based on publicizing our recommendations to others. We have to rely on convincing others of our information, such that they believe they are receiving an opportunity when in reality we are the ones receiving the opportunity.

Any public information being pushed by people online is only advantageous to the sender, never to the receivers. Always question the intent of what people tell you publicly in terms of valuable information because it's always about an advantage for them - not anyone else.

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The content above contains my personal thoughts only and are not representative of anything I am involved with. The following content may contain financial opinions and these opinions do not reflect any professional advice. Speak to a licensed financial professional for actual financial advice.