A small fraction of the population enjoys most capital and wealth creation.

Jacob Miramar

2017-03-15 08:46:00 Wed ET

The heuristic rule of *accumulative advantage* suggests that a small fraction of the population enjoys a large proportion of both capital and wealth creation in a given economy.

This Pareto puzzle persists and prevails in the world’s core economies such as America, Australia, China, Europe, Japan, and even Russia.

In corporate strategic management and industrial organization, a slightly better product or service often leads to dramatically better sales turnover and net profit margin over many years.

Modern examples include Apple's iPhone and iPad, Google's search engine, Microsoft's software design and development, Amazon's ecommerce platform, and Facebook's online social network.

Each of these technological advances represents the cutting-edge and one-of-a-kind proprietary innovation under U.S. patent protection.

Is it about time for us to re-assess the root cause(s) of this Pareto puzzle in the stock market (i.e. accumulative advantage versus competitive advantage in the prescient words of Professor Michael Porter)?


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