There is a company who will break down a brand new car into its component parts and by knowledge of materials and production processes can tell to a very narrow margin what the cost of producing that car is - and therefore the profit potential of each sale. The information about the number of cars sold is either public or more easily obtained than the actual company accounts (public in many jurisdictions due to car registrations).

There are other companies who will buy a bunch of iPhones for example and by carefully analysing the serial numbers can deduce to within a reasonable margin exactly how many have been sold.

Using information like this I'm sure most large trading firms have very good models of the likely performance of each publicly listed company.

I wonder how far down this rabbit hole things go. Do they have people standing outside factories counting how many cars leave on the back of the truck? Do they have access to systems like Galileo in the travel industry where they could figure out how many seats had been booked on a plane, or how many rooms were booked in a hotel? They can then take a good guess at staffing / fixed costs and arrive very much in the correct ball park.

AKA the German Tank Problem (https://en.wikipedia.org/wiki/German_tank_problem). Fascinating application of statistics.

To make that random would be a huge waste and also destroy the potential for creating visible patterns helpful within a lot of industries.

Edit: I just thought about redemption codes, which yes, do aim to be randomized have a huge space relative to the issued codes. In those cases, I see what you mean. Serials of digital media are often and intentionally randomized.

So not everyone randomises.

[0] https://www.bloomberg.com/news/articles/2017-01-27/hedge-fun...

He follows him to a private jet and finds out it's flying to mid-sized city that happens to be the corporate headquarters of a particular company. In the movie it's sort of implied that this activity is illegal.

I wonder if it actually was, and if so, why that would be different than what those hedge fund guys you reference were doing?

Yes. They do. I took a car ride with someone a few years ago who claimed to work for a consulting firm that the big banks+others hire to gather on the ground intel from companies through things like factory tours and shooting the sh*t with employees at bars near the warehouses etc.

Matt Levine writes on the topic pretty regularly. Here's an example with a number of interesting situations.

www.businesslive.co.za/amp/rdm/business/2018-02-01-matt-levine-the-fine-line-between-insider-trading-and-knowing-more-than-others/

This is famously the Eddie Murphy rule - it was a crime to steal the briefcase, but not to trade on the knowledge gained from the contents of said briefcase.

iirc 'Trading Places' is on netflix, and Planet Money[0] did an entertaining episode about this.

[0] https://www.npr.org/sections/money/2013/07/09/200401407/epis...

"Meals on Wheels is accused of receiving insider information about big market movements from dozens of investment bankers. The Meals on Wheels endowment has seen 10x growth in the past 18 months. It looks like the group they provide for will be fed forever, even if we went through another Great Depression-level financial catastrophe. Should they be allowed to keep these funds? It certainly looks bad for the government to fine them hundreds of millions of dollars with the recent cuts in government-provided social programs."

Mostly as an exercise for myself, I've been curious to make a system that would do this. Cameras on all the entrances, license plate tracking, and maintaining an "inventory" of vehicles in the facility.

You could track shift change, number of consumer vehicles (estimating number of people working), number of semis, etc.

Throw things into mechanical turk and you could categorize semis. Maybe that factory that makes big things needs one big component for every unit, and it's super obvious when it comes in on a semi. Boom, that's going to be a strongly correlated factor to production.

Consumer vehicles versus true production over time could help find increases in efficiency.

There are tons of ways to leverage little bits of data, and I think a vehicle in/out tracker would get you a LOT of information.

Of course the problem with that is getting up to the second video feeds (as apposed to delayed video feeds from SKY etc) from a fixed view point. I'm sure you could pay some money to get essentially a security camera feed at the game but that would be expensive.

Which made me wonder whether someone could turn up the night before a big game, park a drone on the roof broadcasting the video to a van with the computers processing the results while evading detection...

Totally unfamiliar with the gambling side of things. Do they set odds at the start of the game and maintain them throughout? There are already companies who will do live "coding" of game events to create a stream of data about the game. Players on the field, time on the field, location of the ball, location of the players, who has possession, possession by player.

There are some other trackers out there targeted for coaches. E.g. track player running speed. If they are going 10% slower than typical after the start of a play in American football, it's a good sign that they need to come out.

The common problem with your idea and mine are getting high enough quality for relatively modest prices. A standard dash cam isn't enough to grab a license plate, it'd have to be at least somewhat better tuned. Drone video from a distance is going to be tough to use to discern who is who and to get valuable info.

I can tell you from professional experience that is most often not insider trading. You might be surprised at the amount of meaningful information that can be legally obtained through research.

I used to (very legally) find and analyze data that would lead to better conclusions than street analysts. The results of equity earnings are basically an open secret among institutional investors before they're announced.

In theory, yes, in practice no.

The reality is this kind of short term incite based investing does not really scale. Over time the money you spend on paying people to do this is less than your risk adjusted long term benefit.

There was somebody who recently demonstrated that you can derive useful information from simply reading SEC filings, which orthodox theorists would presume should already be reflected in stock prices.