Private information should be very hard to come by, it is not something that can be learned in a few minutes from an internet search.
That Tesla is far ahead in EV technology than other car producers it is not private information, so it won’t give you any advantage in trading its stock. There are many other aspects to building a successful car company than just the technological aspects, and Tesla could still very well fail there. It seems also that you implying that January 2020 rise in Tesla price is due to the market suddenly realizing the Tesla lead, but there could many alternative explanations. In fact, it is a highly shorted stock, so for sure your position is debated by many smart people.
Venture capitalists do have access to private information, from financials to getting to known the founders, to internal metrics/datasets on what makes a company successful.
I agree that to be a successful entrepreneur you need to tap private information/build edges. To me it doesn’t look trivial/nor easy at all: there are orders of magnitude more intelligence people than rich intelligence people.
Private information should be very hard to come by, it is not something that can be learned in a few minutes from an internet search.
I think we have different definitions of private information.
I have private information if I disagree with the substantial majority of people, even if everything I know is in principle freely available. The market is trading on the consensus expectation of the future. If that consensus is wrong and I know so, I have private information.
Specifically, when Tesla was trading at $600 or so, it was publicly available that they were building cars in a way that no other company could, but the public consensus was not that they were therefore the most valuable car company in the world.
Similarly, SpaceX is currently valued at $44B according to the public consensus. But I would be willing to be a substantial sum of money that they are worth 5-10x that and people just haven’t fully grasped the implications of Starlink and Starship.
When you think about private information this way, in order to have private information all you have to do is:
1) Disagree with the general consensus
2) Be right
Incidentally, those are precisely the skills that rationality is training you for. Most people aren’t optimizing for the truth, they’re optimizing for fitting in with their peers.
To me it doesn’t look trivial/nor easy at all: there are orders of magnitude more intelligence people than rich intelligence people.
Very few intelligent people are optimizing for “make as much money as possible”. A trivial example of this, almost anyone working in academia could get a massive pay raise by switching to private industry. In addition, people can be very intelligent without being rational, so even if they claim to be optimizing for wealth they might not be doing a very good job of it. There are hordes of very intelligent people who are goldbugs or young earth creationists or global warming deniers. Why should we expect these people to behave rationally when it comes to financial self-interest when they so blatantly fail to do so in other domains?
I’m not even sure I buy the idea that there are more intelligent people than rich people. The 90% percentile for wealth in the USA is north of $1M. Going by the “MENSA” definition of highly intelligent, only 2% of people qualify. That means there are 5x as many millionaires as geniuses.
Private information should be very hard to come by, it is not something that can be learned in a few minutes from an internet search.
That Tesla is far ahead in EV technology than other car producers it is not private information, so it won’t give you any advantage in trading its stock. There are many other aspects to building a successful car company than just the technological aspects, and Tesla could still very well fail there. It seems also that you implying that January 2020 rise in Tesla price is due to the market suddenly realizing the Tesla lead, but there could many alternative explanations. In fact, it is a highly shorted stock, so for sure your position is debated by many smart people.
Venture capitalists do have access to private information, from financials to getting to known the founders, to internal metrics/datasets on what makes a company successful.
I agree that to be a successful entrepreneur you need to tap private information/build edges. To me it doesn’t look trivial/nor easy at all: there are orders of magnitude more intelligence people than rich intelligence people.
I think we have different definitions of private information.
I have private information if I disagree with the substantial majority of people, even if everything I know is in principle freely available. The market is trading on the consensus expectation of the future. If that consensus is wrong and I know so, I have private information.
Specifically, when Tesla was trading at $600 or so, it was publicly available that they were building cars in a way that no other company could, but the public consensus was not that they were therefore the most valuable car company in the world.
Similarly, SpaceX is currently valued at $44B according to the public consensus. But I would be willing to be a substantial sum of money that they are worth 5-10x that and people just haven’t fully grasped the implications of Starlink and Starship.
When you think about private information this way, in order to have private information all you have to do is:
1) Disagree with the general consensus
2) Be right
Incidentally, those are precisely the skills that rationality is training you for. Most people aren’t optimizing for the truth, they’re optimizing for fitting in with their peers.
Very few intelligent people are optimizing for “make as much money as possible”. A trivial example of this, almost anyone working in academia could get a massive pay raise by switching to private industry. In addition, people can be very intelligent without being rational, so even if they claim to be optimizing for wealth they might not be doing a very good job of it. There are hordes of very intelligent people who are goldbugs or young earth creationists or global warming deniers. Why should we expect these people to behave rationally when it comes to financial self-interest when they so blatantly fail to do so in other domains?
I’m not even sure I buy the idea that there are more intelligent people than rich people. The 90% percentile for wealth in the USA is north of $1M. Going by the “MENSA” definition of highly intelligent, only 2% of people qualify. That means there are 5x as many millionaires as geniuses.