Contrarian LW views and their economic implications

Larks

LW readers have unusual views on many subjects. Efficient Market Hypothesis notwithstanding, many of these are probably alien to most people in finance. So it's plausible they might have implications that are not yet fully integrated into current asset prices. And if you rightfully believe something that most people do not believe, you should be able to make money off that.

Here's an example for a different group. Feminists believe that women are paid less than men for no good economic reason. If this is the case, feminists should invest in companies that hire many women, and short those which hire few women, to take advantage of the cheaper labour costs. And I can think of examples for groups like Socialists, Neoreactionaries, etc. - cases where their positive beliefs have strong implications for economic predictions. But I struggle to think of such ones for LessWrong, which is why I am asking you. Can you think of any unusual LW-type beliefs that have strong economic implications (say over the next 1-3 years)?

Wei Dai has previously commented on a similar phenomena, but I'm interested in a wider class of phenomena.

http://thinkprogress.org/economy/2014/07/08/3457859/women-ceos-beat-stock-market/

Market rationality isn't. The fact that if you made an index fund of only female-lead companies it would beat the pants out of the market has been been known for a really long time and still hasn't been arbitraged away. 30 years or so of traders just leaving money on the sidewalk because of testosterone poisoning. Traders are under much greater pressure to not do this than the average employer, so, no, it's perfectly possible that "hire women until you are at risk of being sued for gender discrimination due to your 93 to 1 ratio of females to males, pocket wage savings" would be a winning business strategy. ..

Except, near as I can tell, wages are pretty darn causative of productivity. Yes, causative. Not correlated. Pay people more, and management will find ways for them to produce more. Pay people peanuts, and suddenly, "Go sweep the warehouse with a broom" doesn't seem like a stupid waste of employee time.... This isn't what is in your economics 101 text book? Well, consider where the industrial revolution took of, and what was special about that time and place. It wasnt coal or literacy of technical expertise. China had that in abundance for thousands of years. It was all that and high wages So women who are paid 80% of what a man is, might do 80% of the work, but this is pretty darn likely to be down to the pay, rather than the chromosomes. Or maybe they do 120% of the work and don't get hired anyway. Certainly, this holds in some fields.

Market rationality isn't. The fact that if you made an index fund of only female-lead companies it would beat the pants out of the market has been been known for a really long time and still hasn't been arbitraged away. 30 years or so of traders just leaving money on the sidewalk because of testosterone poisoning.

I don't believe that, and you lay out exactly why one should not believe this claim for an instant: you seriously think that in the the $2.4 trillion+ hedge fund industry - stuffed full of the smartest hungriest slimiest most ambitious money-h... (read more)