The Wrath of Information Disparity

Here is how stock markets really work.

If you and I are looking for an investment, the quality of #information we have may vary significantly.

Our sources may be different.

Hence, you might believe that Apple Inc is a long term investment.

I might say that Apple Inc is not a good investment.

I sell the stock.

You hold or buy more stock.

This sell and buy moves the market.

Millions of people do this and you see the rise and fall in the stock prices.

Stock markets work on information disparity.

Anyone with access to better information wins in the long term.

What if there is universal information parity?

That is, you and I and everyone else has the exact same information.

What happens then?

Everyone would want to buy but there would be no sellers.

Everyone would want to sell but there would be no buyers.

Stagnation would set in.

As a matter of fact, everything in the world works on info disparity.

We all don’t have access to the same quality of info.

The Internet has created some parity but only for info that has low value.

Quality information has a price tag.

The rich can afford better information, the poor subscribe to what is free.

Refined info is like petroleum.

Inferior info is like kerosene.

Data is the new oil and #Google is the new Shell.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: