Honeycrisp apples are sweet but crunchy, a neat genetic trick developed by growers that creates its own demand. People love them and will pay more for them.
I don’t know much about the apple growing business of course, and supermarket pricing is a science these days. But it seems clear that the price is driven by demand for a superior product in limited supply. Gala apples are just fine, very crunchy, but not as sweet.
The problem in the investment world is that, increasingly, there are essentially no “Honeycrisp” investment managers. More than 90% of large-cap funds lag the S&P 500 index SPX, +0.76% over a 15-year period, according to S&P Indices research.