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Cramer is a braggart so who knows which of his (many) stories are true.

On the bigger issue of inside information, this is the entire basis of the stock market. People out in the sticks with no access to corporate data do their own "analysis" and decide that they have uncovered some nugget of information that will make their choice prescient. The fact that this is almost never true is besides the point. It is same logic that those following horse racing use.

I once had some "inside" information about a pending acquisition so I bought some of the stock. The acquisition never took place and the stock went down. Was the information wrong, was it deliberate misinformation designed to pump up the price, or did events just take a different turn, who knows?

Look at the most popular game these days, trading on analyst's "expectations". When the earnings come out the stock goes up or down depending on whether results met expectations, not on whether the company is doing better or worse. Since most analysts work for or with trading firms the opportunities for mischief are limitless.

Even mutual funds play the same game. They sell themselves on the basis of some vague idea that they can perform better than average because of superior stock picking techniques. Of course half do worse than average and half do better. Even the ones who do worse still collect their management fees, however.

Let's stop pretending that we are "investing" and not gambling.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon Mar 26th, 2007 at 02:19:58 PM EST

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