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> If you have a small edge in information, you can make millions. This is one of the misnomer. Economics has enough random stuff and complexity that small edge

> If you have a small edge in information, you can make millions. This is one of the misnomer. Economics has enough random stuff and complexity that small edge doesn’t make huge difference. For example, you can get satellite photos of 100 sample Walmart stores and observe it’s parking lot to conclude that perhaps their quarter would end in negative side. But you might not be aware that the slack is being picked up more than enough by their online operations or that they have new deals for partnerships or some law about to be passed that taxes competition more.

pc86 8y ago
To be fair, if you are making huge trading decisions like this on consumer retail, and ignoring the online component of the third largest online retailer in the US, you're going to lose all your money eventually anyway.
MR4D 8y ago
Uh, no. The key word in the parent poster’s sentence was “can”. You only need one example to prove it - tons of failing examples do not disprove it. For example: If you lived next door to the head server guy at Wells Fargo, and the other night his wife called you to cancel their dinner with you because “there is some big problem at work that he’s dealing with and he has to work thru the night”, and then you decided to short WFC that next morning, then you would have done quite well, but importantly, the information edge would be not only small, but also non-specific.
- sytelus 8y ago
  Well, the guy could be some manager of some small project with some release deadline on his head. This may not have any impact on quarterly financials of $10B company. Big companies like this are very complex creatures and trying to bet because you had glimpse on one data point is trying to predict weather for next month because you felt breeze on your walk.
  - MR4D 8y ago
    You're correct - I should have been more clear on the titling - when I think head server guy, I'm thinking a VP or above level.

pc86 8y ago

To be fair, if you are making huge trading decisions like this on consumer retail, and ignoring the online component of the third largest online retailer in the US, you're going to lose all your money eventually anyway.

MR4D 8y ago

Uh, no. The key word in the parent poster’s sentence was “can”. You only need one example to prove it - tons of failing examples do not disprove it. For example: If you lived next door to the head server guy at Wells Fargo, and the other night his wife called you to cancel their dinner with you because “there is some big problem at work that he’s dealing with and he has to work thru the night”, and then you decided to short WFC that next morning, then you would have done quite well, but importantly, the information edge would be not only small, but also non-specific.

sytelus 8y ago
Well, the guy could be some manager of some small project with some release deadline on his head. This may not have any impact on quarterly financials of $10B company. Big companies like this are very complex creatures and trying to bet because you had glimpse on one data point is trying to predict weather for next month because you felt breeze on your walk.
- MR4D 8y ago
  You're correct - I should have been more clear on the titling - when I think head server guy, I'm thinking a VP or above level.