Luxury Goods

So here are three things I read today:

• The Rich Drink Better Beer, Not More
• There's a new thing called coolspotters that tracks what products celebrities endorse.
• Consumers are incredibly stingy, except when it comes to luxury items.

Of my investments, I'd say three and a half of them less luxury goods to consumers. Canon sells top of the line cameras (as well as high-quality point-and-shoots), Sally Beauty sells salon-quality supplies, and Select Comfort sells premium mattresses. Alberto-Culver has mass market products that are more upscale than average in drug stores and Wal-Mart. The advantage these companies share is pricing power. Basically in hard times, like now, they can decide to drop prices a bit to keep up sales volume, or they can wait around until times get better and raise prices. I have to be honest: I'll probably pay 10% more to get a Canon product over any of the competitors. It might seem irrational, but I think it's justifiable because I know what I'm going to get and I know I'll be happy. I'm sure the same is true of women who buy certain brands of shampoo or soap.