Monday, December 15, 2008

I should preface this by admitting that I have never taken an economics class. But like I said before, I am now authorized to spout on about whatever I want. So I was thinking this evening about how I would like to have a front-loading washing machine "in the new house"*. Naturally, I started thinking about how (at least the last time I was in the market for a washing machine) those ones come at a premium. One thing that seems to be a constant is that, well, price points are constant. A really good example of this is in computers. As long as I can remember, stores have been selling desktop computers at three or four price points. There's always an entry level system for about $999, then two more models, say at about $1299 and $1599 and then there's that deluxe gamer system for $2299. Check again 6 months later, you still see the same prices, but all the hardware has moved down a rank. Most of the hardware that made up the superdeathmachine computer is now found in the mid-range office computer, and so on, down the line until you get to the old entry level system, which is no longer offered at any price. What occurred to me was that, in the stock market, you can do something called shorting, which basically amounts to a gamble that the price of some commodity will fall in the future. But things like computers and washing machines that are sold at various price points are virtually guaranteed to fall in value. I don't want a front-end loading washing machine now, but I will in the future. But that entry level front-end loading machine may not be available then. It will be replaced by a fancier machine at the same price.

Okay, so the solution is probably going to be to go to some clearance center, but I thought maybe by writing about this finance construct and trying to apply it to something like buying a washing machine someone would have a useful idea. I'm an idea guy. I try to find connections between seemingly disconnected things. And that's why I'm not in chemistry, where seemingly disconnected things are disconnected on purpose ... so that they don't blow up.

*The new house is shared fantasy about the future held by Rebecca and I. It can be approximated by imagining a Utopian world shrunk down to a quarter-acre lot.

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