Thread by @NateAFischer

Local investing leverages latent information and judgment.

So many financial "innovations" try to aggregate distributed savings—yet most investors have no edge picking such investments.

Their real edge is in making bets on people and ideas in their own networks and communities.

https://twitter.com/oren_cass/status/1323661557419692032

Robinhood/crowdfunding/etc push small investors into the same commoditized financial products as pros. Instead of leveraging an information edge, they're competing at a disadvantage.

Small investors should be taking advantage of their small size and non-Wall Street context.

If small investors can deploy capital based on real advantages—of information, judgment, or access—they may earn true excess returns. Without this edge, anything beyond passive allocation is simply speculation.

Local investing addresses a broader societal problem: the concentration of wealth and opportunity. The centralization and commodification of finance has helped drive this, rewarding those near the centers of power while letting the rest of the country stagnate.

Instead of centralizing capital in Wall Street before distributing it through elite and credentialed networks (with layers of fees along the way), local investing lets individual investors leverage their own information and relationships to bet on people they know and trust.

You access capital based on your local reputation, not Wall Street ties, and your ideas as judged by people in your local context, not distant pencil-pushers.

Instead of chasing elite credentials and networks, it becomes prudent to build your local knowledge and reputation.

Between local investing and the tech-sector remote work trend, we could see a broad geographic distribution of income, capital allocation, and opportunity as people rethink the centralization paradigm of the past 25+ years, and rediscover the advantages of thinking locally.