Algorithmic Pricing for Kale
Also CVA hedging, the private credit boom, copycat ETF names, KPMG layoffs and an Elon Musk divestiture theory.
Traditionally there are a lot of markets with many, diverse, disorganized, somewhat low-tech sellers. This creates the possibility of getting a bargain: Every so often, you will show up at a yard sale and there will be a Caravaggio for sale for $20 and you will be like “the Caravaggio is $20?” and the seller will be like “yes that seems like a fair price for a Caravaggio” and you will be like “ah yes I see.” This does not happen that often, though yard sales are sort of the paradigmatic location for it.1
I guess another classic case is rental apartments. There are a lot of landlords in big cities who are not fundamentally in the landlord business, who own the house they live in and also rent out a floor. Some of these people might rent to you at below-market rates, either because they like you for some non-pecuniary reason and are not totally motivated by money, or just because they don’t know what the market rate is. Even small professional landlords who own one or two small apartment buildings might undercharge tenants because they are not up to speed on the latest market rates.