Current real estate deliveries were financed in the 2020-22 low-rate era, causing a temporary supply glut in high-demand sectors like Sunbelt apartments. Since new construction halted in 2023, today's depressed prices offer a unique entry point before supply normalizes and rents can accelerate.

Contrary to popular belief, the market may be getting less efficient. The dominance of indexing, quant funds, and multi-manager pods—all with short time horizons—creates dislocations. This leaves opportunities for long-term investors to buy valuable assets that are neglected because their path to value creation is uncertain.

WCM realized their portfolio became too correlated because their research pipeline itself was the root cause, with analysts naturally chasing what was working. To fix this, they built custom company categorization tools to force diversification at the idea generation stage, ensuring a broader set of opportunities is always available.

Today's market is more fragile than during the dot-com bubble because value is even more concentrated in a few tech giants. Ten companies now represent 40% of the S&P 500. This hyper-concentration means the failure of a single company or trend (like AI) doesn't just impact a sector; it threatens the entire global economy, removing all robustness from the system.

The housing industry is resistant to startup disruption due to immense "activation energy." This includes hyper-local regulations, fragmented distribution, cyclical capital needs, and a complex web of legacy players. Overcoming this barrier requires decades of effort, creating a powerful moat for incumbents.

The concept of 'banking deserts' extends beyond underserved regions. When specialized banks like SVB disappear, entire industry verticals (like tech, agriculture, or wine) can become 'underbanked.' This creates a vacuum in specialized credit and financial services that larger, generalist banks may not fill, thus stifling innovation in specific economic sectors.

While AI firms are leasing office space now, the widespread adoption of AI will likely reduce the need for office workers across many industries. This long-term trend of job displacement is expected to create far more vacancy than the current leasing from AI companies fills.

The dominance of passive funds and hyper-short-term pod shops has doubled the average stock price movement in the REIT space. This increased volatility creates opportunities for long-term investors to capitalize on exaggerated market reactions to minor news.

The valuation gap between public and private real estate is historically wide. Sunbelt apartment REITs trade at implied cap rates of 6.5-7%, while similar private assets trade near 5-5.25%. This disconnect presents a compelling opportunity for public market investors to acquire quality assets at a significant discount.