15 Examples of Adverse Selection
Adverse Selection Bias is when one person in a transaction has more information than the other. It is a specific subset of selection bias and has recently been on my mind. A couple weeks ago, in my investment research for HIT Capital I found a stock growing 25% a year and trading at a P/E of 5. To translate that into English, I found a stock trading 4x cheaper and growing 8x faster than the average US company. But in my next level of research, I learned [...]