28. July 2005 20:23
As a consultant, I am sometimes privy to non-public information about a client's company that may affect their stock price in my estimation.
Acting on that information is insider trading, as described over atWikipedia.
I'm not much of a stock trader myself, I stick to the index funds or pick a mutual fund from my 401K provider that has the appropriate level of risk for my age. I've never been tempted to act on any of the information I've seen; mainly because I'm not egotistical enough to believe I really have some good dirt on a company.
Today, however, I think I do. I was at a client's office working out the details of a new project. This client has a significant asset base and they recently decided to start leveraging their assets in a new way that will likely make a fortune for them without having to sacrifice much in the way of management, overhead, or liquidation. That is, they'll keep all their assets, but just put them to work making money in new ways. These new ways, besides management costs (part of which is the cost of the application I'm developing to help them manage these uses), are entirely profit.
Just for fun I might buy 10 shares (currently around $33) and just watch what happens. Does this violate my personal integrity? Maybe; but I don't think I'll loose any sleep over it.