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The End of Conspicuous Consumption? QVC vs. S&P 500

|Includes: Liberty Interactive Corporation (QVCA)

Kyle at Amateur Asset Allocator hosted this week's Money Hacks Carnival and selected my post on Dollar Cost Averaging as an editor's pick.  Thanks, Kyle!

In his introductory comments regarding the nascent economic recovery, Kyle said:

Gone (hopefully) are the days of conspicuous consumption as sound personal finance principles come back in fashion.

While I am equally as hopeful that the economy has indeed turned the corner, I'm not so sure that we, the people, have really changed.

When surfing TV last night, I noticed there are as many silly shopping channels as ever.  Surely, if we had mended our spendthrift ways and sworn off late night calls to buy the latest in vegetable-fashioning technology, there would be fewer channels hawking the stuff.

I decided to create a metric for conspicuous consumption, or at least, The Index of Completely Useless Stuff (TICUS) comparing total revenue at QVC to the S&P 500 index over the last few years.

I pulled the QVC data from the annual reports of its parent company, Liberty Media (NASDAQ:LINTA) for the years 2004 - 2009 and normalized it to the 2004 revenue.  I did the same for the S&P 500 index.  QVC sales track the S&P remarkably well for the good years of 2004-2007.  It looks like we spent 2008 doing a little shopping therapy.


I think I'll just mope on the couch admiring my new tennis bracelet with Diamonique(NYSE:R) simulated diamond baguettes until this whole nasty recession thing just goes away.

Full disclosure: No positions.  And should you buy the QVC tennis bracelet (I don't know why you would), I do not receive a commission.

Tip of the hat, also to Ironman at Political Calculations who picked my post on Dollar Cost Averaging as The Best Post of the Week, Anywhere! Grazie.