FuturProof #93: Liquidity Premium Arbitrage

Investors must pay for liquidity. With all else equal, public investments should be valued higher than private investments.?

Private investments tend to lag behind the public markets, where information flows more freely and reaction times are faster.?

In unique circumstances, you may have massive and indiscriminate selling in public investments while the private investments continue to be bought. Similar investments can be valued higher in the private markets than they are in the public markets, which logically makes little sense.??

This can create an opportunity to buy fundamentally-strong public investments at valuations where you are getting high liquidity without necessarily paying for it.

Disclaimers:?https://bit.ly/p21disclaimers

Not any type of advice. Conflicts of interest may exist. For informational purposes only. Not an offering or solicitation. Always perform independent research and due diligence.