How information gets into price

In most finance classes we talk about how information gets into the price of securities. Here is a great example. Apple (which SIMM owns) has traded down on rumors that Steve Jobs is sick.

Traders have been looking for information to prove or disprove these rumors. how far will they go? How about asking frozen yogurt clerks?

Steve Jobs In Great Health -- Frozen Yogurt Clerk (AAPL):

"Can't someone -- anyone -- verify that he's still walking around, doing his normal activities?

The answer: Yes, and he's fine, according to a frozen yogurt store clerk."

So suppose this clerk sees Jobs and then buys on this "news". It is by this trade that private information (Jobs had frozen yogurt) is incorporated into stock price.