Tuesday, November 22, 2016
A fine example for all you aspiring readers who want to Invest Like A Farmer of "scarcity value" (and most likely a bubble) is the launch and ravenous demand for Snapchat Spectacles. Some choice commentary by an arbitrage master who literally rented a helicopter to get 4 pairs: "I have no clue what these things do. I don't even have a Snapchat," commented John Reuter to the Wall Street Journal. Yet these $130 glasses were quickly flipped for over $1200 each.
The mania in buying, especially prior to holidays for hot items with limited supply is a great niche economic field. Master of product launch exploit it to the fullest, creating scarcity by advertising products that were manufactured to run out with timed releases across multiple high-visibility channels. Two great books on this phenomenon are Extraordinary Popular Delusions and The Madness of Crowds and Tulipmania: The Story of the World's Most Coveted Flower & the Extraordinary Passions It Aroused.