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.

Traditional value metrics are arbitraged away by quants. The new edge lies in unconventional scenarios like stocks with cult followings and assets fueled by zero-day options, similar to how sports strategies evolve to extremes. Fundamental analysis is now just table stakes.

Counter to conventional value investing wisdom, a low Price-to-Earnings (P/E) ratio is often a "value trap" that exists for a valid, negative reason. A high P/E, conversely, is a more reliable indicator that a stock may be overvalued and worth selling. This suggests avoiding cheap stocks is more important than simply finding them.

In the world of hyper-short-term pod shops, a stock being "cheap" is a sign of a broken thesis, not a value opportunity. This highlights a fundamental philosophical divide where traditional value investors see opportunity, while pods see a reason to sell immediately.

Over the past two decades, equity analysis has evolved beyond simply valuing a company's physical or financial assets. The modern approach focuses on identifying "alpha" factors—trading baskets of stocks grouped by shared characteristics like strong balance sheets or non-US revenue exposure.

Despite decades of evidence, there is no agreement on why factors like "value" (cheap stocks outperforming) work. The debate is split between rational risk-based explanations (Fama's view that they are inherently riskier) and behavioral ones (Shiller's view that investors make systematic errors). This uncertainty persists at the core of quant investing.

Contrary to classic theory, markets may be growing less efficient. This is driven not only by passive indexing but also by a structural shift in active management towards short-term, quantitative strategies that prioritize immediate price movements over long-term fundamental value.

The era of constant central bank intervention has rendered traditional value investing irrelevant. Market movements are now dictated by liquidity and stimulus flows, not by fundamental analysis of a company's intrinsic value. Investors must now track the 'liquidity impulse' to succeed.