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Is speculation a good or bad thing?

"So-called “speculative” profits reward those who correctly anticipate new information and thus provide a powerful incentive to produce new information."

   --  Randy Barnett

Inside information

"the prevailing market price reflects the price at which the marginal seller is willing to transact with the marginal buyer. The market price of, for example, a house is as influenced by the decisions of all homeowners who prefer to hold on to their property than accept the prevailing market price as it is influenced by those at the margin who consent to such transfers.Therefore, a person in possession of “windfall” information concerning a particular scarce resource still contributes importantly to the welfare of others by causing the price of that resource to move in an information-revealing direction, whether the direction is up, down, or unchanged. The price-effect of the decision to trade or refrain from trading results notwithstanding the fact that the trader may neither have produced the information nor intentionally disclosed it. As before, I do not claim that this information process is perfect, but only that it is both vital and irreplaceable."

   --  Randy Barnett

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