The Search for Asymmetrical Information

Kevin Fryer recently loaned me a copy of Ken Fisher's remarkable book, The Only Three Questions that Count: Investing by Knowing What Others Don't.As the title suggests, he makes the case for knowing (and actively searching for) information that no-one else knows. The logic and the detailed examples based on historical data are terrific. This book will radically alter your view of investing.It was interesting, recently, to find Mr. Fisher's premise replayed in an on line course from MIT. That course dealt with asymmetric information as applied to business decisions.In marketing, we invest a lot of time on customer research. But, one seldom sees a research objective that reads, "to learn something about customers that no-one else knows". But, isn't that the real objective?Perhaps one of the most successful companies at levering asymmetric customer data is Procter & Gamble.There were several case histories within P&G of the power of the annual brand surveys. The process includes an annual round of quantitative and qualitative research for each brand.As the story is told, during a 1960s California focus group for Tide, environmental concerns about phosphorus in detergent emerged. The company acted on the consumer concern, reformulated the product, re-engineered the plants and stayed ahead of the competitors, the regulators and the nascent environmental movement in the US. In fact, the reformulation of Tide put the company several years ahead.Finding the asymmetric data on your market could lead to a huge payoff.