Traditionalism and Efficiency

Information is an essential element of the transactions and financial markets, but it can access various forms (usually named soft and hard information). The new technologies modify the pattern of communications and thus substantially changing the performance of the markets and financial institutions. The financial institution that provides credit used to obtain the soft information only if the hard information generates contradictious signals or if it is difficult to apprehend. One of the great advantages of hard information is the reduction of trading costs by using less specialized employees or computers. When soft information is substituted with hard data, appear a concentration, the loss of information being imminent. The question that arises is how much information is lost and what is their quality. Dependence of investment decisions of the others' is often why stock market problems appear.