Positional stocks

January 26, 2012

Conspicuous consumption — buying what others can’t afford — is a disequilibriating force.  Prices get raised and supply is limited.  The goods that are conspicuously consumed are positional goods.

A similar phenomenon occurs in the stock market.  AAPL currently seems to fit the mold.  Fashion changes.  I don’t much believe in predictions, but I predict that “bite of Apple” will have a new connotation in the foreseeable future.

Epilogue

Perhaps the best possible explanation of “positional good”.

Subscribe to the Portfolio Probe blog by Email

Latest posts

Leave a Reply

Related posts

  • Low volatility investing and benchmarks

    April 21, 2012

    The focus on tracking error rules out a low volatility strategy. Simply put, most money managers are focused on outperforming their benchmarks without adding risk. And because risk is [...]

  • Replacing market indices

    April 2, 2012

    If equity markets suddenly sprang into existence now, would we create market indices? I'm doubtful. Why an index? The Dow Jones Industrial Average was born in 1896.  This was [...]

  • The Battle of Fundamental Index

    March 16, 2012

    The pro and con of fundamental indexing. Last Tuesday the London Quant Group sponsored a boxing match between forces for and against fundamental indexing.  Adam Olive was in the [...]