“I often think of the time I met Scott Sumner and he said he pretty much assumes the market is efficient and just buys the most expensive brand of everything in the grocery store.” - a Tweet

It's a funny quip, but it captures the vibe a lot of people have about efficient markets: everything's priced perfectly, no deals to sniff out, just grab what's in front of you and call it a day. The invisible hand's got it all figured out—right?

Well, not quite. This isn’t to say efficient markets are a myth, but rather that their efficiency is a statistical property, describing the average participant, and thus leaving ample room for individuals to strategically deviate and find superior outcomes.

I recently moved to New York City, and if there's one thing people here obsess over, it's apartments. Everyone eagerly shares how competitive, ruthless, and “efficient” the rental [...]

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Outline:

(02:03) The Interior View of Market Efficiency

(02:14) Preference divergence

(03:49) Temporal advantage

(05:08) Supply asymmetries

(05:48) Legibility and filters

(06:33) Intangibles

(07:26) Principal-agent problems

(08:04) Search advantages

(09:15) Circumvent the market

(09:57) From apartments to everything else

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Narrated by TYPE III AUDIO.