By Edward Schneider:
In trying to outperform the market, one has to figure out what information is not priced in. This can be obtained in two ways. First, short-term information may not be reflected like upcoming quarterly results, buy-out, or other yet-to-be announced news. Trading on this non-public news often borders on insider-trading, which is not only illegal, but is now being enforced by the SEC. A second way to achieve outperformance is through longer-term market and competitive analysis.