When portfolio insurance was small-scale, the assumption that the stock and futures markets were external "things" in which prices would not be affected significantly by the insurers' purchases or sales was plausible enough. But what if portfolio insurance was adopted widely? In January 1983, after attending an LOR presentation, Bruce Jacobs of the Prudential Insurance Company of America wrote in a memo to his employers (reproduced in Jacobs 1999, pp. 301-304) that "if a large number of investors utilized the portfolio insulation technique, price movements would tend to snowball. Price rises (falls) would be followed by purchases (sales) which would lead to further price appreciation (depreciation)."

Donald MacKenzie, An Engine, Not a Camera, loc. 809