Yes, there is class of investment strategies which go by the name of "liquidity constrained". If there is a small... market inefficiency out of which you can extract, say, $100,000/year but no more, none of the big investment firms would bother -- it's not worth their time. But for an individual it often is.

Can you please say more about these and how to find them?

Liquidity is a characteristic of a financial asset which, without going into technicalities, is an indicator of how quickly and how cheaply can one buy or sell large amounts of this particular asset in the open market.

Some assets -- like the common stock of Apple or US Treasury bills -- are very liquid. There is a continuous market, very large volumes are changing hands daily, and orders to buy and sell are filled rapidly, with low transaction costs and without pushing the market.

Some assets -- like specific bonds or, say, tracts of land in Maine -- are no... (read more)

Open thread, Dec. 21 - Dec. 27, 2015

by MrMind 1 min read21st Dec 2015233 comments


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