Weekly Musings 31 8/7/11
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For those who are new to the Musings: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, thank you for supporting the site, and I hope the Musings spark new appraisals and insights.
The 10% Solution
Last week I posted a link to computer-modeling research that suggested a mere 10% of the populace could "convert" the other 90% if the initial 10% were unwavering believers in their cause.
Let's stipulate this was a computer model and not a theory drawn from real-world observation or research. Perhaps the magic number isn't 10%; maybe it's closer to the Pareto Principle of 20%.
Regardless of the actual threshold, I think the model speaks to our profound attraction to group-think and the reassurances offered by holding the same views as those around us: the more unshakeable the belief of the minority, the more appealing it may be to those seeking the security of group-think.
This is of course the psychological basis of manias, bubbles and apparently bizarre mass movements such as the Flagellants of 1348-49, thousands of whom wandered through central Europe whipping themselves and each other for the sins which had presumably brought the Black Death down to decimate Europe.
I wonder if this model doesn't help explain the spread of Apple products. The fanatic core users (recall I bought an original Mac back in 1985) are generally unshakeable in their belief in the superiority of Apple products, and joining this "cult of cool" is very appealing.
But as my longtime friend G.F.B. recently observed, now that everyone in line has an iPhone, too, then the coolness factor might be reaching a critical threshold of collapse. In other words, Apple may now be the Microsoft of smartphones and iPods.
Perhaps this "conversion process" via unshakeable faith eventually reverses as the non-core converts shed their faith.
This dynamic of a core group converting those around them also makes me think of the Obama political campaign in 2008. A core group of people were inspired by his message and what he represented, i.e. a cosmopolitan, non-traditonal president.
Now that President Obama has squandered enormous opportunities to reform the financial sector and set the nation on a sounder financial footing, not to mention withdrawing from unpopular wars, I wonder if the faith of his core believers has cooled below the critical threshold of conversion/persuasion.
If the answer is yes, then we might extend that to predict his defeat at the hands of an opponent who has that 10% core of true believers. If both candidates lack a cadre of true believers, then the election will be a toss-up as voters hold their noses and vote for the least-worst rather than for the one who inspires their loyalty and faith.
Consumer Metrics Institute Sees Uptick
The Consumer Metrics Institute measures consumer demand by a unique metric: "year-over-year changes in consumer demand for on-line discretionary durable goods. The indexes measure the slope of the demand curve, not the actual demand itself."
Interestingly, the Institute recently noted a sharp upswing in consumer demand--minor in terms of actual demand but still a statistically relevant reversal of declining demand. Is this an outlier, a one-off, or are those consumers with cash or credit buying again?
Though the general economic trend is visibly down, we should always remain alert to trend reversals, which have a peculiar habit of occurring once the consensus swings to one side. While cyclical charts suggest the final bottom in stocks and housing might not be reached until 2013, 2014 or even 2015, it is possible that the stock market will find enough of a "surprise" rise in consumer spending to rally in its best months, November and December.
That is just a speculative thought, not a prediction. Anyone risking money in any market is best served by constantly seeking evidence that their current position might be wrong.
From Left Field
The Arizona aircraft boneyard-- Google Map this phrase: "309th Aerospace Maintenance and Regeneration Group" and explore the site yourself--amazing, and sobering--what immense treasure was expended designing and manufacturing these thousands of high-tech aircraft.
"Philosophy is the battle against the bewitchment of our intelligence by language."
(Wittgenstein, via William S.)
Thanks for reading--
charles