Will the Shaving Bubble Burst?

Students of economic history and market bubbles certainly are familiar with the market crash of 1929 in which unbridled optimism (the sky's the limit!) and the ability to buy stocks on credit led first to incredible stock-value inflation. Profit taking and market uncertainty led to increased selling. Too many sellers and insufficient buyers led to falling prices, which forced credit buyers to sell to cover their loans. Everything snowballed resulting in the spectacular market crash.

Similarly, in the 17th century there was a rampant speculation in tulip bulbs (of all things!), in which bulbs were selling for outrageously high (and eventually unsupportable) prices. When the market came to its senses and realized that these highly-priced bulbs did not have the requisite intrinsic value to support their prices, investors began selling to take their profit and get out. Like in the stock market, too many sellers and insufficient buyers led to falling prices -- dramatically falling prices. In the aftermath, many bulb buyers were left with tulip bulbs valued at much less than their purchase prices, with no market to sell for anything but a great loss.

Now traditional shaving is the thing. Shaving businesses, both physical and virtual, continue to  open and expand. Some of this expansion is certainly supported by new buyers entering the market. However, this expansion is also fueled to some degree by acquisition disorder, in which participants are buying products at a rate that exceeds their use.

If I were heavily invested in a shaving business, with inventory and perhaps store rent and staff to support, I would be warily and constantly watching for signs that the growth may begin to subside. Key questions include the following:

• At what point will the rate of new entrants into the traditional-shaving arena begin to slow?
• At what point will existing traditional-shaving enthusiasts realize that they have more than enough razors, blades, soap and aftershave?
• Are there any economic analysts studying and predicting traditional-shaving-market trends?

I'm not that good at predicting the future. (If I were, I'd likely be rich, retired, and living elsewhere.) However, if I had a business dependent on selling shaving products, I'd be working very hard at improving my prediction skills.

Happy shaving!