Something I'm wondering about though: The article makes it sound like this is some new unfair advantage of the big traders. But isn't this an old game? If you can afford to acquire and process the data you're likely going to beat the other participants. That was always true. I don't see what's qualitatively different here. Is there?
Eamon Javers' book Broker, Trader, Lawyer, Spy covers some cases of this sort of thing. One I can easily remember is a hedge fund flew private planes around taking areal photos near power plants. Coal fire power plants store their fuel out in the open and they buy it by the train-load, so they were able to time the market based upon when power plants were going to make large coal purchases, as they do it when their piles of coal reach a certain size. I don't remember the numbers quoted in the book but they made money doing this, it was a couple percent.
It's only unfair if you think your 401k or personal trading account is/can/will grow anything like what hedge funds do. This coal market manipulating fund, they put money in, flying planes around and taking pictures isn't free, then they did analysis on the pictures which wasn't free, then they put real money in to the market to bet on it moving a certain way... which they are really only allowed to do because there is a counter-party that is willing to take that bet on. If it were really egregious, you could argue that the folks buying energy at incrementally higher rates are getting the shaft and that's not really fair but their energy provider could be smarter about when it orders up fuel. Once it goes public, the players and market tend to react to it
A world in which nobody bothered to check whether a company was actually producing anything would turn the stock market into a collective guessing game.
This is kind of a thing in China.
Finding someone successful at stock picking and asking him what he did to be successful is like finding that 1 out of 1024 person who flipped a coin heads 10 times in a row and asking him what makes him such a great coin flipper.
The hard part is not regressing to the mean, and consistently beating the market, which sure, nobody can do. But if I learn today that a stock is going to rise tomorrow, and I buy as much as I can, the stock will rise a bit today. So the market has become a little bit more efficient.
That I happen to then base all my subsequent trades on overconfidence and tossing darts doesn't retroactively invalidate that trade. You can even make a market more efficient on losing trades- you short a stock, it goes down a bit, but you spend more maintaining the short than the stock goes down. Then, the stock crashes after your short expires. Oops! But your prediction was still partly right, and that information was integrated into the price a bit earlier than it would have been without you.
The alternative is a Soviet-style disconnection from reality. A market planner in a far-away office planned for a farm to produce some amount of output, so, that's how much the farm officially put out, nevermind that there was a drought and part of the output was diverted to the black market etc. But how is the planner supposed to know? Without feedback, without the truth, it becomes impossible to come up with accurate numbers for anything. Without the truth, the economy is a house of cards.
That's not too surprising. Isn't that the entire motivation?