While popularity is usually a good thing, buying what other investors are avoiding has a long history with the experts, from Graham and Dodd to Warren Buffett. When it comes to investing, popularity offers a framework for understanding and predicting factors and the underlying preferences that set asset prices.
In classical finance, investors are risk averse with premiums seen as payoffs for that risk. Alternatively, in behavioral finance, investors may have preferences that go beyond rational behavior.
In the CFA Institute Research Foundation monograph, Popularity: A Bridge between Classical and Behavioral Finance, the authors identify some characteristics likely to be popular and then compare the performance of stocks that should be popular with those that should be unpopular.