# Legibility Premium The easier an opportunity is to explain, the more you pay to own it. - A clear story attracts many buyers. Price rises and excess return falls. - The game moves from selection to access. You win allocations. You no longer pick. - Illegible assets are cheap. Illegible does not mean undervalued. The market can be right. ```mermaid graph LR A[Hard to explain, low price] --> B{Does a legibility event come?} B -->|yes, and the asset is good| C[Easy to explain, high price] B -->|no| D[Stays cheap, capital trapped] B -->|yes, and the asset is bad| E[Market was right, you take the loss] C --> F[Late buyers pay the premium] ``` ## The return needs two states - Illegible now, so the price is low. - Legible later, so a future buyer can understand it. - The real bet is on the legibility event: a metric, a regulation, a first customer, a comparable sale. ## The builder's version - A builder can create the event. [[Rimau/The Legibility Thesis]] makes an opaque asset class investable. ---- tags: #boat #investing links: [[Scarcity Migration]] [[Concepts MOC]] [[Asset Pricing]] [[Marginal Dollar Test]]