Dec

18

Clustering, from Nils Poertner

December 18, 2025 |

There is this known phenomenon that coffee chains (Starbucks, Costa Coffee) in a city are often next to each other. Same for gas (petrol) Stations. Makes no sense for the customer but applying game theory it certainly does.

Perhaps the same could be said for analysts forecasts by major broker dealers?

Early 2010 (pre Eurocrisis) I recall speaking to a Deutsche Banker covering Italian regional banks. She said she would have loved to write a more bearish story but was afraid of internal repercussions (as they were trying to win other business from those Italian banks).


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2 Comments so far

  1. Oliver Joseph on December 18, 2025 12:20 pm

    Clustering is an interesting phenomenon and occurs for a myriad of reasons in my experience. In franchise operations coffee shops or as I am more familiar with car dealerships site selection plays a crucial role in the success of a franchise. Competitors will often have a lot of overlap in site selection metrics which in turn leads to clustering. From the lender perspective there is a perceived notion of less risk being incurred when other logical actors are making similar investments in a certain geography. From a consumer perspective clustering leads to a greater selection of product in a smaller geography. Similar benefits are enjoyed by vendors who are able to scale their operations and serve more businesses while reducing costs. This creates a virtuous cycle. Similar feedback loops are evident in nature and perhaps other markets as well.

    This is my first post on this message board and I am very grateful to Mr. Niederhoffer and everyone involved for creating a space such as this. Over the years I have yearned for a community of like minded individuals and have struggled to find a place where I felt as though I fit in. Reason and the scientific method seem to me woefully under-applied at the present moment and this seems like a group of people genuinely betting the other way. So I offer my genuine heartfelt thanks.

  2. armidal7 on December 22, 2025 10:21 am

    Oliver: I sent you an email inviting you to join SPEC List. If you didn’t see it, please check your junk folder.

    -Admin

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