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What we mean by information arbitrage Information arbitrage is not a tip and it is not a model. It is the lag between a public document and the price that has not finished reading it. Most of that lag is boring. A number in a filing does not match the number in the release. A risk factor changes by a sentence Information arbitrage is not a tip and it is not a model. It is the lag between a public document and the price that has not finished reading it. Most of that lag is boring. A number in a filing does not match the number in the release. A risk factor changes by a sentence...…
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cheese
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cheesse…
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What we mean by information arbitrage
I InfoArb Sample
Information arbitrage is not a tip and it is not a model. It is the lag between a public document and the price that has not finished reading it. Most of that lag is boring. A number in a filing does not match the number in the release. A risk factor changes by a sentence. An earnings call spends four minutes on a customer the press release never names. None of this is hidden. It is just unread, or read by fewer people than the headline. The work is the comparison. Release against filing. This quarter against the language management used last quarter. What was said against what was filed...…
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Reading a press release against the filing
I InfoArb Sample
A press release is a speech. A filing is the minutes. The useful reading is the distance between them. Start with the headline, then ignore it. The headline is written for the wire. The filing is written for the record, and the record is where the hedges live: the customer who is "in discussions," the contract that is "expected," the growth rate that is "adjusted." None of those words are illegal. They are just softer than the headline that sat on top of them. Then read the call, if there is one, against both. Management will often explain the number they wanted you to remember and skip...…
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Where small-cap disclosure usually goes quiet
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Small and micro-cap disclosure does not usually go quiet in the risk factors. Those are loud, and mostly recycled. It goes quiet in the places a reader skips because they look like housekeeping. The customer concentration table that loses a name. The related-party note that gains a sentence. The going-concern paragraph that moves from the footnotes to the front and is never mentioned on the call. The share count in the release that does not match the count on the cover of the quarterly report. A director who stops standing for reelection, listed in a proxy nobody opens. None of that is a...…
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