8 ms·

How Supermodels Are Like Toxic Assets

88 points by mcknz 16y ago

Jun8 16y ago
Interesting! The rise to prominence of supermodels seem to follow similar patterns to websites and startups: Why did this startup was funded rather than that one. People would list all kinds of theories but as the article declares "Nobody knows".
- aspiringsensei 16y ago
  Thanks for the tl:dr there. I was kind of hoping for a conclusion beyond "IDK."
- sadapsi 16y ago
  I disagree, websites and startup serve some purpose and they are aided by forces which aren't as appearant as one would like them to be. E.g. Youtube was aided by mass adoption of Flash Twitter was aided by the rise of "texting" Foursquare was aided by rise of phones with GPS Facebook was aided by being founded at one of the most privileged universities, consider this since the earlier users of Facebook were Harvard alum/ugrads, they sure had connections and social skill much above the general population. However it is hard to tell which effect would aid you!
greenlblue 16y ago
So if the value of some abundant commodity, e.g. houses, models, etc. is highly dependent on social proof or some other metric that depends on 'gut' feelings to derive its value then that commodity is susceptible to being irrationally valuated.
- hugh3 16y ago
  Is it that analogous to houses? Entire housing markets can be overvalued, but you never get individual houses getting significantly overvalued compared to others in the same area. This, incidentally, is what Coco Rocha looks like: http://fashionindie.com/wp-content/uploads/2010/02/Coco+rocha+face.jpg http://fashionindie.com/wp-content/uploads/2010/02/Coco+roch... I don't understand it either.
  - jewbacca 16y ago
    I'm pulling this mostly out of my ass, but I'm pretty sure that to call a fashion model misvalued because of her facial attractiveness is misunderstanding fashion models. Fashion models are not Maxim models; I'd imagine they're actually actually fairly disconnected pools of talent. There is some conjunction (eg. Sports Illustrated), but there's an availability bias -- most of the fashion models you or I are aware of are the ones who are culturally relevant outside the fashion world (mostly for being really hot). The value of a Maxim model comes from how sexually attractive she is to men. They'll mostly be shorter, healthier and have bigger breasts. Maxim models are also subject to the cultural whims of their audience and their variable loci of attractiveness, not all of them defined by purely physical factors -- Danica Patrick or Hillary Duff, while I certainly wouldn't kick them out of bed, in a cultural vacuum of pure adolescent horniness, would not be in the same league as Miranda Kerr. Fashion models are frames for hanging art. A weird, angular face may be an important component in the look of a piece of clothing. Art also undeniably interacts with the personal character it's associated with. With most art, that's only in the creator, but I'd imagine that in fashion modeling, most of the spectators who care will perceive a piece of clothing and the character of a show by the composition of the personalities of the models in it. In high-fashion, anyways, where I'd imagine, like in the highest-level in any field, distinction is tuned down to subtle details that neophytes wouldn't even notice: it is crudely and fundamentally complementary to a fashion show or line to be shown off on somebody attractive; but when you get up there in talent, every detail, including the model, must be tuned to some creative harmony, and that value is not at all captured in the sexual attractiveness of a model by herself. [again, disclaimer: I actually have no idea what I'm talking about. I haven't opened a Maxim in 6 years, I've watched a few episodes of America's Next Top Model, and I'm otherwise a red-blooded Canadian heterosexual male nerd.]
    - jonny_noog 16y ago
      I can't claim to be an expert either, but for what it's worth I think you're pretty spot on there. In the realms of high fashion - along side the artistic considerations you describe - you're dealing primarily with the ideal of female beauty as it is seen from the perspective of certain kinds of women and gay men, as most fashion designers, commentators and other such interested parties are women or gay men. As opposed to the stereotypical, heterosexual male ideal that one might see on display in Maxim et al.
nroach 16y ago
"So our plot thickens: What’s at the center of this collective “gut feeling” that happens to land on Coco, ratcheting up her popularity and hence, her economic value? The answer holds parallel lessons for how traders in finance markets were able to assign so much inflated value to relatively worthless mortgage assets now known as “toxic assets.” Substitute Coco for certain high-profile blogger/entrepreneurs and fashion designers for VCs/investors and you get some interesting parallels. Sometimes the "it" factor overrides otherwise interchangeable attributes.
- baguasquirrel 16y ago
  True, but stocks, homes and startups all have to eventually produce value, which is a comforting thing.
  - sapphirecat 16y ago
    > stocks, homes and startups all have to eventually produce value I have to disagree. Companies fail and homes can burn or be subject to other natural disasters. And, at least part of a home's value is judged not on what the home actually provides, but how it looks. In some respects, all countertops are the same, but for value assigned, granite beats wood.
- ericb 16y ago
  I suspect one factor is a sort of priming. Take Perez Hilton which sounds a lot like Paris Hilton and Obama, which sounds a lot like Osama. In both cases, the collective conscious was primed for the sounds of the name in the brands. I don't think the associated imagery transferred over to the new association necessarily, but I feel like the stimulation of similar precursors (several people the previous year who maybe looked a little like Coco Rocha) in the group's consciousness may be a factor.
gxti 16y ago
It's not just "nobody knows" -- it's "there isn't a reason". Big difference. It is impossible to reason about what intrinsic values cause one model to be more highly touted than another because there aren't any. The value ascribed is entirely extrinsic. This is the obvious way in which markets are different: even though prices get way overinflated from speculators chasing trends, there is in fact a real fundamental value buried in the noise and sooner or later the people who are good at finding that value will outweigh the noise traders and trend chasers. Then the momentum turns into fear (because none of the speculators knew what they were doing) and we have a lovely crash. It's painful and irrational but eventually enough people wake up and realize that prices are nowhere near valuation. Models don't crash. They disappear, but there's no "reckoning" in which their popularity is brought back to true values of beauty. The momentum is the only source of value.
- Jun8 16y ago
  I agree with you that there's a big difference between those two, but not in the sense that you mention. Adopting the "there's no reason" approach is akin to treating the process as random. First advocated by Boltzman to lay the groundwork of statistical physics, this approach basically says that the process is so complex that the only way to deal with it is through probabilistic methods. This approach in fact is widely used in analyzing stock markets. So in fact, the current wisdom is not to disregard the "noise" in the market to arrive at the "real" model, but to treat the whole market data as noise!
  - timwiseman 16y ago
    Adopting the "there's no reason" approach is akin to treating the process as random. First advocated by Boltzman to lay the groundwork of statistical physics, this approach basically says that the process is so complex that the only way to deal with it is through probabilistic methods. I must respectfully disagree with you and agree with gxti. Based on the article, it seems that what gets a modelling career started to build up its momentum is virtually random. Once it is started its own momentum can sustain it for some time, but that start is random. Now, the market on a day to day basis is indeed virtually random. But the overall trends are not. Over the long term with general trends, the stock of strong companies will do well because they generate profits which are largely independent of the stock price. On the other hand, a high stock price might bolster an otherwise failing company for a while, but only for a while. Daily fluctuations are almost entirely random, but long term trend lines will tend to track the actual value of a company, with some exceptions.
sutro 16y ago
Both are like crack cocaine for investment bankers. Hay-O!
philwelch 16y ago
"In such situations, a few early key individuals end up having a disproportionately large effect, such that small differences in initial conditions create large differences later in the cascade. We see such effects in fields ranging from consumer fads (think Atkins—everyone knows a meat-and-cheese diet isn’t healthy for you!), science (like global warming), and technology (VHS beat BETA in the video market, though BETA was a superior machine)." You can still start huge flamewars by expressing an opinion either way about global warming or even Atkins, but VHS is a bad example--Beta had better video quality, but VHS had longer duration and people hate getting up to change cassettes in the middle of a movie. As for global warming, no matter which side of the argument you agree with there's no comparison here either--the opinions of scientists studying the issue of global warming formed throughout the past three or four decades, and the opinions of the general public are a result of political pressure both ways--neither was a response to early opinion makers.
- Psyonic 16y ago
  Agreed. That little aside nearly ruined the article for me, as I mentioned in a comment of my own.
Psyonic 16y ago
This almost made me stop reading: "We see such effects in fields ranging from consumer fads (think Atkins—everyone knows a meat-and-cheese diet isn’t healthy for you!), science (like global warming), and technology (VHS beat BETA in the video market, though BETA was a superior machine)." Such over-simplification made me question the rest of the article as well.
- bobbyi 16y ago
  His account isn't "over-simplified". It is exactly wrong. VHS won because VHS was a "superior machine". It could fit an entire movie on a single cassette while the original Beta tapes could only hold an hour.
  - Psyonic 16y ago
    Agreed. Superior depends on what metric you're measuring by, and the public chose the one most important to them. It is over-simplified about Atkins, however. I'm not going to argue that Atkins is necessarily the best way to eat, but it was ahead of its time in pointing out the problems of refined carbohydrates.
anigbrowl 16y ago
Another, albeit inadvertent, example of the risk factors: the Asian model depicted midway through the article - seemingly for purely visual reasons, as she's not mentioned at all - committed suicide unexpectedly in 2009, apparently due to the pressures of her modeling career. So not only is asset selection driven by hunch and/or groupthink, but the desire to maximize ROI from a productive asset can destabilize it.
andrewljohnson 16y ago
I always thought model jobs were decided by who was willing to sleep with the boss.
- ImFatYoureFat 16y ago
  I know you kid, but there is a lot to be said for the fact that lack of margin leads to corruption. ie, the best way to discourage this kind of behavior would be to create some sort of noticeable difference in value from one model to the next.
- crpatino 16y ago
  how is this supposed to provide a competitive advantage? ;)

88 points by mcknz 16y ago

Jun8 16y ago

Interesting! The rise to prominence of supermodels seem to follow similar patterns to websites and startups: Why did this startup was funded rather than that one. People would list all kinds of theories but as the article declares "Nobody knows".

aspiringsensei 16y ago
Thanks for the tl:dr there. I was kind of hoping for a conclusion beyond "IDK."
sadapsi 16y ago
I disagree, websites and startup serve some purpose and they are aided by forces which aren't as appearant as one would like them to be. E.g. Youtube was aided by mass adoption of Flash Twitter was aided by the rise of "texting" Foursquare was aided by rise of phones with GPS Facebook was aided by being founded at one of the most privileged universities, consider this since the earlier users of Facebook were Harvard alum/ugrads, they sure had connections and social skill much above the general population. However it is hard to tell which effect would aid you!

greenlblue 16y ago

So if the value of some abundant commodity, e.g. houses, models, etc. is highly dependent on social proof or some other metric that depends on 'gut' feelings to derive its value then that commodity is susceptible to being irrationally valuated.

hugh3 16y ago
Is it that analogous to houses? Entire housing markets can be overvalued, but you never get individual houses getting significantly overvalued compared to others in the same area. This, incidentally, is what Coco Rocha looks like: http://fashionindie.com/wp-content/uploads/2010/02/Coco+rocha+face.jpg http://fashionindie.com/wp-content/uploads/2010/02/Coco+roch... I don't understand it either.
- jewbacca 16y ago
  I'm pulling this mostly out of my ass, but I'm pretty sure that to call a fashion model misvalued because of her facial attractiveness is misunderstanding fashion models. Fashion models are not Maxim models; I'd imagine they're actually actually fairly disconnected pools of talent. There is some conjunction (eg. Sports Illustrated), but there's an availability bias -- most of the fashion models you or I are aware of are the ones who are culturally relevant outside the fashion world (mostly for being really hot). The value of a Maxim model comes from how sexually attractive she is to men. They'll mostly be shorter, healthier and have bigger breasts. Maxim models are also subject to the cultural whims of their audience and their variable loci of attractiveness, not all of them defined by purely physical factors -- Danica Patrick or Hillary Duff, while I certainly wouldn't kick them out of bed, in a cultural vacuum of pure adolescent horniness, would not be in the same league as Miranda Kerr. Fashion models are frames for hanging art. A weird, angular face may be an important component in the look of a piece of clothing. Art also undeniably interacts with the personal character it's associated with. With most art, that's only in the creator, but I'd imagine that in fashion modeling, most of the spectators who care will perceive a piece of clothing and the character of a show by the composition of the personalities of the models in it. In high-fashion, anyways, where I'd imagine, like in the highest-level in any field, distinction is tuned down to subtle details that neophytes wouldn't even notice: it is crudely and fundamentally complementary to a fashion show or line to be shown off on somebody attractive; but when you get up there in talent, every detail, including the model, must be tuned to some creative harmony, and that value is not at all captured in the sexual attractiveness of a model by herself. [again, disclaimer: I actually have no idea what I'm talking about. I haven't opened a Maxim in 6 years, I've watched a few episodes of America's Next Top Model, and I'm otherwise a red-blooded Canadian heterosexual male nerd.]
  - jonny_noog 16y ago
    I can't claim to be an expert either, but for what it's worth I think you're pretty spot on there. In the realms of high fashion - along side the artistic considerations you describe - you're dealing primarily with the ideal of female beauty as it is seen from the perspective of certain kinds of women and gay men, as most fashion designers, commentators and other such interested parties are women or gay men. As opposed to the stereotypical, heterosexual male ideal that one might see on display in Maxim et al.

nroach 16y ago

"So our plot thickens: What’s at the center of this collective “gut feeling” that happens to land on Coco, ratcheting up her popularity and hence, her economic value? The answer holds parallel lessons for how traders in finance markets were able to assign so much inflated value to relatively worthless mortgage assets now known as “toxic assets.” Substitute Coco for certain high-profile blogger/entrepreneurs and fashion designers for VCs/investors and you get some interesting parallels. Sometimes the "it" factor overrides otherwise interchangeable attributes.

baguasquirrel 16y ago
True, but stocks, homes and startups all have to eventually produce value, which is a comforting thing.
- sapphirecat 16y ago
  > stocks, homes and startups all have to eventually produce value I have to disagree. Companies fail and homes can burn or be subject to other natural disasters. And, at least part of a home's value is judged not on what the home actually provides, but how it looks. In some respects, all countertops are the same, but for value assigned, granite beats wood.
ericb 16y ago
I suspect one factor is a sort of priming. Take Perez Hilton which sounds a lot like Paris Hilton and Obama, which sounds a lot like Osama. In both cases, the collective conscious was primed for the sounds of the name in the brands. I don't think the associated imagery transferred over to the new association necessarily, but I feel like the stimulation of similar precursors (several people the previous year who maybe looked a little like Coco Rocha) in the group's consciousness may be a factor.

gxti 16y ago

It's not just "nobody knows" -- it's "there isn't a reason". Big difference. It is impossible to reason about what intrinsic values cause one model to be more highly touted than another because there aren't any. The value ascribed is entirely extrinsic. This is the obvious way in which markets are different: even though prices get way overinflated from speculators chasing trends, there is in fact a real fundamental value buried in the noise and sooner or later the people who are good at finding that value will outweigh the noise traders and trend chasers. Then the momentum turns into fear (because none of the speculators knew what they were doing) and we have a lovely crash. It's painful and irrational but eventually enough people wake up and realize that prices are nowhere near valuation. Models don't crash. They disappear, but there's no "reckoning" in which their popularity is brought back to true values of beauty. The momentum is the only source of value.

Jun8 16y ago
I agree with you that there's a big difference between those two, but not in the sense that you mention. Adopting the "there's no reason" approach is akin to treating the process as random. First advocated by Boltzman to lay the groundwork of statistical physics, this approach basically says that the process is so complex that the only way to deal with it is through probabilistic methods. This approach in fact is widely used in analyzing stock markets. So in fact, the current wisdom is not to disregard the "noise" in the market to arrive at the "real" model, but to treat the whole market data as noise!
- timwiseman 16y ago
  Adopting the "there's no reason" approach is akin to treating the process as random. First advocated by Boltzman to lay the groundwork of statistical physics, this approach basically says that the process is so complex that the only way to deal with it is through probabilistic methods. I must respectfully disagree with you and agree with gxti. Based on the article, it seems that what gets a modelling career started to build up its momentum is virtually random. Once it is started its own momentum can sustain it for some time, but that start is random. Now, the market on a day to day basis is indeed virtually random. But the overall trends are not. Over the long term with general trends, the stock of strong companies will do well because they generate profits which are largely independent of the stock price. On the other hand, a high stock price might bolster an otherwise failing company for a while, but only for a while. Daily fluctuations are almost entirely random, but long term trend lines will tend to track the actual value of a company, with some exceptions.

sutro 16y ago

Both are like crack cocaine for investment bankers. Hay-O!

philwelch 16y ago

"In such situations, a few early key individuals end up having a disproportionately large effect, such that small differences in initial conditions create large differences later in the cascade. We see such effects in fields ranging from consumer fads (think Atkins—everyone knows a meat-and-cheese diet isn’t healthy for you!), science (like global warming), and technology (VHS beat BETA in the video market, though BETA was a superior machine)." You can still start huge flamewars by expressing an opinion either way about global warming or even Atkins, but VHS is a bad example--Beta had better video quality, but VHS had longer duration and people hate getting up to change cassettes in the middle of a movie. As for global warming, no matter which side of the argument you agree with there's no comparison here either--the opinions of scientists studying the issue of global warming formed throughout the past three or four decades, and the opinions of the general public are a result of political pressure both ways--neither was a response to early opinion makers.

Psyonic 16y ago
Agreed. That little aside nearly ruined the article for me, as I mentioned in a comment of my own.

Psyonic 16y ago

This almost made me stop reading: "We see such effects in fields ranging from consumer fads (think Atkins—everyone knows a meat-and-cheese diet isn’t healthy for you!), science (like global warming), and technology (VHS beat BETA in the video market, though BETA was a superior machine)." Such over-simplification made me question the rest of the article as well.

bobbyi 16y ago
His account isn't "over-simplified". It is exactly wrong. VHS won because VHS was a "superior machine". It could fit an entire movie on a single cassette while the original Beta tapes could only hold an hour.
- Psyonic 16y ago
  Agreed. Superior depends on what metric you're measuring by, and the public chose the one most important to them. It is over-simplified about Atkins, however. I'm not going to argue that Atkins is necessarily the best way to eat, but it was ahead of its time in pointing out the problems of refined carbohydrates.

anigbrowl 16y ago

Another, albeit inadvertent, example of the risk factors: the Asian model depicted midway through the article - seemingly for purely visual reasons, as she's not mentioned at all - committed suicide unexpectedly in 2009, apparently due to the pressures of her modeling career. So not only is asset selection driven by hunch and/or groupthink, but the desire to maximize ROI from a productive asset can destabilize it.

andrewljohnson 16y ago

I always thought model jobs were decided by who was willing to sleep with the boss.

ImFatYoureFat 16y ago
I know you kid, but there is a lot to be said for the fact that lack of margin leads to corruption. ie, the best way to discourage this kind of behavior would be to create some sort of noticeable difference in value from one model to the next.
crpatino 16y ago
how is this supposed to provide a competitive advantage? ;)