The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails

The Doors of Perception

Wall Street’s accumulation, and application, of financial information rivals, and quite possibly exceeds, the efforts of major news organizations, and even many governments. It has been this way for centuries. The Rothschilds famously realized that information was better than money in the 1800s. They constructed a network of carrier pigeons and couriers to gather and ferry information across Europe. The Rothschild network was much faster than diplomatic and royal mail service. The family supposedly first learned Napoleon had been defeated at Waterloo, which naturally produced prodigious profits. An ingenious system also existed in revolutionary America.

In the earliest days of the United States, Philadelphia was the nation’s financial capital, and the site of the nation’s first stock exchange. European ships, laden with goods and market-moving information, docked in Manhattan some 85 miles away. The road to Philadelphia was often congested with speculators, stock-jobbers, agents of foreign investors, and others anxious to make use of the information at the Philadelphia Stock Exchange before anyone else learned the news. This was problematic for exchange members until, in 1790, the exchange’s leaders implemented a clever solution worthy of Benjamin Franklin:

The coups scored by these early commuters led a group of Philadelphia brokers to set up signal stations on high points across New Jersey. The signalmen watched through telescopes as coded flashes of light ...