I've found the only stocks where I can personally be successful stock picking are companies I have some sort of unique relationship or experience with that is uncommon or unavailable to sophisticated investors or analysts.
E.g. you're an IT admin at Big Co overseeing software contracts. You can often get interesting insights by looking at things like how aggressive their sales reps are with end of quarter discounts (how desperate are they to meet numbers that quarter?). Or if you see a company completely dropping the ball within your org, but on CNBC you constantly hear how great the company is by pundits and analysts -- maybe you know something the pundits don't.
Often times the consensus view of a stock trails reality by a few weeks to a month - there's a lot of non-public but also non-confidential information that isn't readily available to analysts, but exposed to employees of customers/vendors/partners/end-users.
TLDR: when stock picking or day trading, pick companies within the niche of the world where you're a SME.
Insider trading isn’t because he has non-public information. It’s based on trust/fiduciary responsibilities. It would be a hard sell to claim he betrayed anyone’s trust by trading on the performance he saw as a customer.
That’s not insider trading. It’s using nonpublic information, legally.
The example that my business school professor gave was that if you’re riding in an elevator with two executives and they talk about how they’re going to miss numbers and trade it’s not insider. If one of them tells you specifically, it is.
> The example that my business school professor gave was that if you’re riding in an elevator with two executives and they talk about how they’re going to miss numbers and trade it’s not insider. If one of them tells you specifically, it is.
That's why I always shout my inside information within earshot of my financial adviser but never actually place any trades myself.
E.g. you're an IT admin at Big Co overseeing software contracts. You can often get interesting insights by looking at things like how aggressive their sales reps are with end of quarter discounts (how desperate are they to meet numbers that quarter?). Or if you see a company completely dropping the ball within your org, but on CNBC you constantly hear how great the company is by pundits and analysts -- maybe you know something the pundits don't.
Often times the consensus view of a stock trails reality by a few weeks to a month - there's a lot of non-public but also non-confidential information that isn't readily available to analysts, but exposed to employees of customers/vendors/partners/end-users.
TLDR: when stock picking or day trading, pick companies within the niche of the world where you're a SME.