Over the years, some of my lady friends told me they see up tick in their business when stock market does well. The reverse is also somewhat true but with a floor. Greenspan called it “Wealth effect” ... that is when market goes up ppl feel richer - whether they truly made the money or not - and spend more!
Given the talk about the recent status of the biz in the other thread, and given that Dow has gone up by roughly 50% since Trump got elected, Ladies, are you seeing an up tick in your biz? Guys, are you spending more than usual? Or, shall I say does your dick go up more as you see Dow blasting away its own records?I have not, not sure what has been going on these past two months but its been pretty quiet in Atlanta.
A lot of fast change and uncertainty. New tax codes, CC are becoming due on Christmas consumerism. And the flu virus either sick or caretaking. I am very optimistic that spring will be looking good for Atlanta!
Maddie
From a purely economic perspective we would have to evaluate the demand (buyers) side Marginal Propensity to Consume (MPC). That's the percentage of each marginal dollar(eco-speak for additional dollar) that will be be spent on consumption (in this case - on pussy). I guess MPC in this scenario could also be an acronym for Marginal Pussy Consumption.
Anyhow, generally speaking the higher the marginal income the lower the percentage of that income that will be spent on consumption and the MPS (Marginal Propensity to Save) increases. These are expressed as percentages of additional income - not dollars. So while high income earners tend to spend a lower percentage that does not mean they will spend fewer dollars since they, particularly with investment income, receive far greater amounts than lower income individuals.
Example 1: A Walmart associate (single mother with 2 kids) making $10 an hour will gain an additional $3.47 every week under the new tax law. Her MPC averages 115, meaning she spends $1.15 of each 'new' dollar (yes her MPC is more than 100% - she's in a disavings position - so her $3.47 will translate into an additional $3.99 in spending per week. High percentage - low dollars.
Example 2: A well heeled investor (divorced male with 2 kids and high alimony - of this I am well aware) making $320K a year makes an additional $15K on his portfolio this year. He has an MPC of 90 (spends 90% of the windfall) and will spend $1,500 of his additional $'s. He may well choose to do so on by-the-hour female companionship.
So the simple answer is that a bullish stock market, Ceteris paribus (all else being the same), should be beneficial to the P4P market.
Points well made!
One follow up ?: will your analysis still be true for perceived (not actual) income. For example, in your example 2, if that investor sees his portfolio of $500000 doubles to $1 mil but he does not sell anything or take his profit - so it is all paper income. The question is, does he spend more (on pussy) or in other words, does his MPC or Marginal Pussy Consumption go up?
My limited empirical data from provider friends say it does.
My own behavior is in line with this expectation - my MPC goes up when I see my portfolio going up - significantly!
Wonder whether other guys detect this in their own P4P spending behavior?
Do ladies see this happen?
While a lot of other factors play a role in the 'spending' of retained equity your observation is generally true. Even though the gains are not very liquid they do impact budgeting decisions. Paper gains do tend to provide a sense of security for future income that will have an effect on current spending. That and how horny you happen to be.....
My income is mainly derived from the success if the market. I manage near 200 million for my clients. I charge a percentage of the portfolio for my fee. When the market goes up 20 percent, my income goes up 20 percent. Now that I am no longer tied to one civvie/provider I am able to spend more. Fortunately after the break up i pored myself into work so i grew my clietele at the right time. Now however my limitations on the hobby have more to do with time than money.