Remember our contrarian question: what important truth do very few people agree with you on? If we already understand as much of the natural world as we ever will—if all of today’s conventional ideas are already enlightened, and if everything has already been done—then there are no good answers. Contrarian thinking doesn’t make any sense unless the world still has secrets left to give up.
An investor tells me that with each investment, Peter Thiel likes to ask: What do I know about this company that other investors don’t know? In other words: Do we have an edge? It’s only with some sort of informational asymmetry, goes the thinking, that one can not only beat the market but dominate it, and get the kind of return that takes a $500,000 check and turns it into a billion.
The first is the role of what is sometimes referred to as asymmetric information. Insiders - those concerned with the management of bubble companies - know much more than the outsiders, whom the insiders want to part from their money. Such asymmetries always exist in business, of course, but in a bubble the insiders exploit them fraudulently.
As Supreme Court Justice Louis D. Brandeis once wrote, “Sunlight is said to be the best of disinfectants.” Information is a beacon, a cudgel, an olive branch, a deterrent—all depending on who wields it and how. Information is so powerful that the assumption of information, even if the information does not actually exist, can have a sobering effect.
Levchin: We kept the stuff under wraps for a very long time. We never really showed IGOR to anyone. We never talked about it in the press. I was definitely very paranoid.
In business, there is nothing more valuable than a technical advantage your competitors don't understand. In business, as in war, surprise is worth as much as force.
As the capstone of this system, Rockefeller fostered an extensive intelligence network, assembling thick card catalogs with monthly reports from field agents, showing every barrel of oil sold by independent marketers in their territory. From 26 Broadway, the titan could peer into the most distant corners of his realm. ... Standard’s reputation as a pervasive, all-seeing presence was richly deserved.
