MOVE BEFORE THE MARKET DOES

December 17, 2021

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Over the last few months, I’ve noticed a lot of stories about cybersecurity breaches. In technology and beyond, change creates opportunities for some and risks for others.

Hackers love to find previously unknown vulnerabilities, or so-called zero day exploits. Recent examples include incidents at leading IT companies like SolarWinds and Microsoft. I can’t help wondering how many of these security breaches remain undetected.

When nobody else knows there’s a problem, then there definitely won’t be a solution, and the hackers profit. This can also leave a lot of other companies or people exposed to risks they’re not even aware of.

In some ways, this reminds me of my experience in financial markets. Great investors win by seeing more clearly and sooner than the competition. The investor who spots a trend early gets a chance to buy in at a favorable price. Great insights are perishable, and great deals don’t last for long. Like the old saying goes, the early bird gets the worm.

There is another similarity in the tradeoff between exploiting insights and revealing them. Big moves can affect the whole market and are likely to attract attention. The more you take advantage of an opportunity, the more other players will notice and react.

Whether it’s hackers with a zero day exploit or financial analysts with an insight, we are always making similar tradeoffs. Act quickly, before others do. But remember that moving boldly will alert competitors who can erase your advantage. Once a vulnerability is patched or the market has priced in the trend, then it’s back to the drawing board.

Of course, real estate markets are very local and every deal is unique. Our market-beating insights require a lot more detail, which we don’t always want to broadcast. In some ways, just like with hackers, investors can often benefit from moving quietly.

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