Modern information theory tells us (apparently) that information is “surprise”, or that which is unexpected. Another way to express this is that the value of knowledge is related to the amount of surprise it embodies. If it’s fully expected, it has no value. It will not alter, or really even reinforce, our current plans or present course.
This idea is analogous to the Efficient Markets Hypothesis (EMH) in finance theory. There are various forms of EMH but the most basic implication is that generally available and widely accepted information or analysis cannot be expected to be a source of economic profit (i.e., a level of profit beyond that necessary to compensate for the risk of the investment). All such information is already incorporated into investor expectations and therefore already built into current market prices. Once it is incorporated into expectations, the information holds no further value. In theory, it no longer constitutes a valid basis for an investment decision. It contains no further “surprise”.
Only “surprise” provides you with an advantage.
We strive to surprise.
17 November 2016