We analyze a model of a monopolistic informed investor who receives private information

sequentially and faces a post-trading disclosure requirement. We show that this trading

model can be transformed into a fictitious consumption-saving model with a borrowing constraint.

Hence, insights from the consumption-saving literature can be adapted for the trading

model. For example, analogous to the insights from the permanent income hypothesis,

the informed investor “saves” more of his current information when expecting less future information

advantage (“saving for rainy days”) or more uncertainty about it (“precautionary

saving”) and smooths his information “usage” over time (“consumption smoothing”).