To: Harry Larson who wrote (6224 ) 12/6/1997 10:57:00 AM From: Steve Robinett Read Replies (2) | Respond to
Harry, Excellent Forbes piece. I have a theory I call my Information Pricing Theory. It goes like this. If we had next week's Wall Street Journal, would we tell anyone about it? Of course not. We could make money hand over fist with next week's Journal so we'd act on the information rather than tell people about it. Let's say the copy of next week's Journal was a little smudged so that only 80% of it was useable. We could still make a lot of money and wouldn't tell anyone about it. Say the paper is 50% smudged. We might use limit orders but we could still make money acting on the information. As the paper gets more and more smudged--40%, 30%, 20% useable--the information in it becomes less and less valuable until the only way we can make money is by selling the paper itself rather than acting on the content, a novelty item with next week's date.
