There has never been a better time to shave the sheep than it is now, in the field of so called high end audio. Like on an assembly line, a "fine piece of equipment" is produced in somebody's basement and paying for his mortgage. The thinking goes like this: even if I sell only one, I'll be riding the horse.
And the economics? I had a friend who got into so called Timeshare business in the early 90s. The scam started in England, as usual. After all, they invented Ponzi schemes at an university decades ago. My friend organized Timeshare business in one of the poorest countries in the world. While we were walking and talking one day I asked him about his business. But during this walk, every half an hour or so he would rush into a nearby gambling area with slot machines. He would quickly lose few hundred euros and then get out and we continue our talk. That was a monthly average salary in that country. Although he was a refuge like me, he was full like a ship. He told me that the cost of the timeshare payable to the business owner in England was $4000. And my friend's starting timeshare price at the presentation was - $18,000! I asked how is that possible. He said he has his students on the street inviting people to presentation in the most luxurious hotel in town, completely free and no obligations. People would think ok we have no money, we go have a couple of whiskeys, spend nice time at nice setting, experience something. So they go and sales pitch starts about only $18000 and what you get for this incredibly low price. But we have no such money - says the couple (my friend said he is particularly interested in getting couples on those presentations). They didn't finish the sentence and my friend puts his hand on the woman's hand, looks her straight into her eyes and ask - How much you've got? Only 200. And my friend's second hand get on the woman's other hand while he proudly announced - Sold, you've got yourself timeshare!
High end audio is like timeshare. The real price should be 4 to 5 times lower than the advertised price. But who are the sheep, pardon buyers? In my experience, mostly people who played stock market index after each recovery. For example, S&P from March 2009 to this date goes practically straight line up. Let's say you are in 2010 and you see quantitative easing goes as expected. You invest 50k into the index (very important (I for example invested in Microsoft when it was $26 and now is $63, but I invested in a bunch of other losers as well) and your gain right now is at least 60%. You get $30k gain - and buy expensive speakers. You may think you gain money on stock market, but the very first day you bought those overpriced speakers you lost two thirds of the money i.e. you lost $20k out of those $30k. I.e. you purchased overpriced stock, pardon speaker. As simple as that.
