What You Know That the Markets Don't
They say the market is smarter than you...
The "efficient-market hypothesis" boils down to this claim: If you know something, everybody else probably knows it too.
For example, you may think one company has a bright future while another is doomed. But the theory claims that if you've figured this out, so has everyone else. Thus, the market prices the stock accordingly.
That's how the theory goes at least.
The way I see things, it's not possible. Of course you know things that almost nobody else knows.
Take me, for example... I've had a wide-ranging career. I know a lot about medicine – particularly ophthalmology. I've been an entrepreneur, so I know the risks and rewards of starting a business. I have some good insights into the wine and beverage markets. I know how to run a public company. And I even know something about how popular Venezuelan food is in the American Southeast.
You know things, too... Whether it's about movie box-office numbers, golfing equipment, or a new tool used at your job, I'm sure you know things that many other people don't.
You can use that knowledge to profit.
Remember, we're not just trading ticker symbols. Stocks represent tiny ownership stakes in real, operating businesses. So to argue that everyone knows what matters in these businesses just isn't true.
I've seen articles and medical journals that pointed to a clear investment opportunity in a stock. But even though the information was out there for anyone who wanted to read it, the stock didn't move until it was covered by 60 Minutes or the mainstream media.
So yes, you do know things that can help you earn money in the market. You just need to put that knowledge to work.
If you've been reading my stuff for any length of time, you've seen me quote Peter Lynch. The legendary fund manager directed the Fidelity Magellan Fund from 1977 to 1990. He posted a seemingly impossible annual return of 29% during his time there.
Lynch's central thesis is that you can know and see things that Wall Street can't. He calls it "the power of common knowledge." Here's an example from Lynch...
I had a great luck company called Hanes. They test marketed a product called L'Eggs in Boston and I think in Columbus, Ohio, maybe three or four markets. And [Lynch's wife] Carolyn brought this product home... and she said, "It's great." And she almost got a black belt in shopping...
She's a very good shopper and she would buy these things. She said, "They're really great." And I did a little bit of research. I found out the average woman goes to the supermarket or a drugstore once a week. And they go to a woman's specialty store or department store once every six weeks. And all the good hosiery, all the good pantyhose is being sold in department stores. They were selling junk in the supermarkets. They were selling junk in the drugstores.
So this company came up with a product. They rack-jobbed it, they had all the sizes, all the fits... They never advertised price. They just advertised "This fits. You'll enjoy it." And it was a huge success and it became my biggest position.
Lynch went on to make many multiples of his money on Hanes... all because his wife was a customer.
Now, to be clear, there's more to successful investing. You need to understand how companies make money, how their shares are valued, and what the market currently expects from them. You shouldn't put your life savings into one stock just because you like the company's product.
However, all investors are searching for an edge. If you have real-world knowledge about what consumers are out there doing, that's an edge right there.
And if you want a system for finding winning stocks built around real-world indicators, then I suggest you check out Stansberry Research's new Shadow Data Indicator ("SDI").
This system follows real people who are using real technology in real time. And it uses trends in their behavior to form an investment thesis.
For instance, well before the average investor knows anything about a new breakthrough technology, software developers are already testing it, building on top of it, and sharing it with each other.
That activity leaves a trail of data. The SDI tracks that trail. And when the technology crosses three critical thresholds, it triggers a buy signal... before any of it shows up in the headlines.
In a back test, the SDI could have turned $10,000 into more than $600,000 since December 2017. Now, it's ready to help you book a series of double- and triple-digit returns – regardless of what the market does next.
If you want to learn more about the SDI and the exciting new editor behind it, then I suggest you check out this recent presentation.
What We're Reading...
- Something different: March Madness 2026: CBS Sports sets viewership records during most-watched first NCAA Tournament weekend ever.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
April 8, 2026