The causes and effects of the statistical phenomenon are not simple or obvious. There may be many causes for the one effect, and sometimes the effect itself could be a cause.
In markets, value follows from success, but is often also its determinant…
Concentrations reflect analyst consensus, which gathers around capital by necessity…
… and which reinforces the consensus and gives shape to the investment thesis.
The power-law distributions that result are an attribute of winners taking most… in asset management as well as allocation…
… and by extension a value driver for positions held.
- Where there are power-law manifestations, there also are network effects.
- These are never one-directional…
- … and are usually marked by growing clusters that are often linked.
It isn’t just momentum anymore.
