Cabbage Patch Dolls, iPhones and Alibaba

By Dian Vujovich

There appears to be something really amiss in the way ordinary folks and investors are thinking these days and that the disconnect between reality and common sense has gotten wider throughout the decades. It’s as if American’s are suffering from a brain bubble that’s far more personally damaging than any market bubble could ever be. Perhaps that is because the intense competition to get something that’s hot—be it a doll, phone or share of stock—clouds any and all sense of reality. And in the end, getting that “ it “ has become more important than the “it” itself.

Let’s begin with Cabbage Patch dolls

Created in 1978 by artisan Xavier Roberts, in three years these kind of ugly-cute cloth Cabbage Patch dolls were all the rage. By 1983, they were in such high demand retailers couldn’t keep their shelves stocked with them. Parents, not wanting to disappointed their little darlings wishes, stood in lines for hours, fought with one another and even rioted in stores to make sure that didn’t happen.

I remember thinking back then that that behavior was just crazy. After all, we were talking a doll here. And aren’t parents supposed to have some common sense and teach their kids about value and commercialism? Throughout the decades, I’ve leaned that’s not always the case.

Enter iPhones and Alibaba.

Yesterday, (9/19/14), hundreds of people stood in line at the San Francisco Apple store, many having slept on the streets the night before, just to get a glimpse of, and perhaps shake the hand of, Apple CEO, Tim Cook. And, of course, be one of the first to purchase Apple’s newest iPhone 6.

Also yesterday, trading for the much-anticipated IPO, Aiibaba, a Chinese company that BTW has been trading on the Hong Kong stock exchange since 2007 and shares of it are already in numerous portfolios including those of US mutual fund companies, opened hours later than expected. Why? Because of the enormous amount of buyers for the stock and so few sellers. (The NYSE is an auction market meaning that to avoid market chaos, there needs to be some balance between the number of buyers and sellers of a stock.)

If products are your thing, owning and playing with a Cabbage Patch doll and all the razzmatazz included on the new iPhone can surely bring with it hours of fun.

As for Alibaba, the only joy from it will be gotten from an increase in the stock’s per share price. Pain will ensue if the share price falls, or, if per chance, some of the billions the company now has are used to gobble up American companies.

From a long-term perspective, I think it’s time we all begin to realize that there is more to living a quality life than getting stuff and an overabundance of money.

Looked at another way, between the three—-a doll, phone and share of stock–,playing with a rag doll is more likely than not the healthiest for our minds and our souls.