Insider trading
Sir: Having just read Nicholas Davenport's article (2 December) on 'Insider trading', I must commend him for insisting that 'we could do with a little harmless insider trading', but not for the reason he gave.
The market does not only utilise inside information: it must rely upon it. To play the market in any other manner would be to invest blindly, which is a most risky business, or to forgo the chance of profit. Information is necessary, for no 'system' exists by which an investor may stand a reasonable chance of gain. To outlaw inside information will force investors to play the market blind or illegally. Hence the risk of investing in shares will rise, which will cause investors to seek less risky outlets for their money. The closest substitute is public sector debt.
So, regardless of the moral arguments behind the act, its main consequence will be to augment the funds available to the government, whilst reducing those available to the private sector.
S. M. Flynn 43 Auckland Oval, Darlington, Co. Durham.
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