By Peter Gorenstein, Daily Ticker
In the accompanying interview The Daily Ticker’s Aaron Task and Daniel Gross discuss just how prevalent insider trading is on Wall Street with Barry Ritholtz director of research at FusionIQ.
"It may not be completely and totally rigged but damn if the odds aren’t against the average investor," exclaims Ritholtz. That does not however mean the pros are trading secrets amongst themselves. "Real inside information is actually surprisingly rare [but] I wouldn’t be surprised if it’s traded on pretty actively," he says.
In Ritholtz’s experience what separates the successful professionals from the average individual investor is an information edge, in terms of research and analysis, not privileged information. Most of the rumors whispered around trading floors simply don’t hold water, he says. "The best of the fund managers — they’re doing their own channel checks," i.e. legitimate research on industry trends from which they make informed bets about the fate of related companies.
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