With information now ubiquitous, the primary source of market inefficiency is no longer informational but behavioral. The most durable edge is "time arbitrage"—exploiting the market's obsession with short-term results by focusing on a business's normalized potential over a two-to-four-year horizon.

Contrary to conventional wisdom, the massive flow of capital into passive indexes and short-term systematic strategies has reduced the number of actors focused on long-term fundamentals. This creates price dislocations and volatility, offering alpha for patient investors.

Daniel Gladys argues that as passive investing grows, fewer participants focus on fundamentals. This widens the gap between a stock's price and its intrinsic value, creating a favorable environment for disciplined value investors who can identify these overlooked opportunities.

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.

Contrary to the belief that mega-cap stocks are efficiently priced, behemoths like Alphabet can see 100% price swings in a single year. This volatility creates massive opportunities for patient investors who ignore market noise and focus on fundamentals.

Today's markets are less efficient because the dominant players—passive funds, retail traders, and short-term quants—do not invest based on long-term fundamentals. This creates a significant arbitrage opportunity for investors who are willing to focus on a company's intrinsic value over a one- to three-year horizon, a timeframe now largely ignored.

The modern market is driven by short-term incentives, with hedge funds and pod shops trading based on quarterly estimates. This creates volatility and mispricing. An investor who can withstand short-term underperformance and maintain a multi-year view can exploit these structural inefficiencies.

Short-term performance pressure forces fund managers to sell underperforming stocks, creating a self-fulfilling prophecy of price declines. Investors with permanent capital have a structural advantage, as they can hold through this volatility and even buy into the weakness created by others' behavioral constraints.

Investor John Lin finds an advantage in China because its market is dominated by short-term retail investors (the "taxi driver narrative"). This creates volatility and mispricing, offering opportunities for patient, fundamentals-focused investors who can withstand the noise.