By Jim Cramer, TheStreet

 

The other day, while I was speaking and signing books at the 92nd Street Y, someone asked me what I thought of the "perfect market theory," that everything is pretty much known about stocks simultaneously and no one can get an edge.

 

I laughed. I said give me a break. It's wrong EVERY DAY.

 

Monday was no different. Consider the biggest gainer, Allergan (AGN), which rose 5.5% on its approval of Botox for migraines. When the approval news came out after the bell on Friday, I was confident of two things: (1) The "in the know" people would know this is no surprise and (2) the "out of the know" people would think it was revelatory and take the stock up much higher.

 

Both came true. Both are antithetical to the perfect-market thesis dreamed up by professors who have never traded and are smoke-and-mirror artists.

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Here's the deal. Not that long ago, I had David Pyott, the CEO of Allergan, on "Mad Money," and he assured the audience that Botox would soon be approved for migraine use. He made it clear that because it is used with such success in Europe, because there is nothing else available for serious migraines, because there is a premium on anything that cuts the number of days down, you are going to get a rapid FDA nod.

 

At the same time, he said, it would make a huge impact on earnings -- so huge that they called it "El Grande" within the company. I wrote and talked about El Grande endlessly since then because I knew that numbers 1 and 2 would both come into play.

 

Sure enough, the news comes out and the market acts like it is a big surprise -- even though the CEO made the market opportunity and the time frame of approval very clear just a couple of months ago.

 

The next time someone says that this whole homework/edge business is nonsense, remember Allergan and Botox. Not only is news not discounted equally, but playing the news is still one of the most lucrative games in town.

 

At the time of publication, Cramer had no positions in the stocks mentioned.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to follow Cramer's Charitable Trust trades.

 

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