Overton’s Window Creates Opportunities for the Brave
7th November 2022
I was recently asked by a former colleague why I had increased my exposure to certain sectors in the equity market. After all, the information that had informed my decisions must already be priced in since the market is efficient, he argued. One could spend plenty of ink on the definitions of market efficiency as is usual in academia, but let’s just not. Instead, I’d like to argue that the market, at least important parts of it, may have become notably less efficient due to changes to the information landscape.
Many may be familiar with the concept tragedy of the commons. Jointly used land (commons) tends to be overused, polluted, and so on. Today’s information landscape actually resembles such a common. Today’s information commons has however become limited (reduced flora and fauna) and less valuable (the soil has been depleted), for several reasons.