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“It makes women feel comfortable and confident. I stop and cheer every time I see a woman get on the wheel.”
– Susan B. Anthony on a bicycle
The 1880s saw cyclists move from sitting directly – and carelessly – over the large front wheel of the Victorian penny-farthing to the more secure position between the two wheels of the modern bicycle.
This change was made possible by the ability to design chains that transfer the load to the rear wheel of the bicycle, leaving the front wheel to be steered. Innovations such as diamond-shaped frames, weldless steel tubes, and pneumatic tires soon completed the bicycle’s transformation from a dangerous novelty to the sport and exercise we know today.
Safe, easy and comfortable travel was a quick hit. Within a few years, bicycle manufacturing became a thriving business, and the number of bicycle manufacturers in Birmingham alone rose from 72 in 1889 to 177 by 1895.
This caused a mania among investors who wrote Boom and Bust: A World Economic History describe it as “a vivid illustration of the benefits of bubbles.”
Manic investors drove shares up 258% in the first five months of 1896, which attracted a large number of new stock market listings: In the two years to 1897, 670 tire, tube or tire companies floated shares on the English stock market.
Many of these were very low-profile, such as Accles Ltd., which sold £135,000 worth of shares but only made £71 a share before repaying the investment in less than two years.
Apparently, the surrounding parts were lost 73% of their value from the peak of Bicycle Mania in the early months of 1896 to late 1898.
Although it was painful for investors, the shock was worth it: The recession helped revolutionize the tire industry which later supported the car industry and encouraged advances in machine tools and ball bearings that spread throughout English manufacturing and beyond.
Best of all, the number of cheap bikes that were produced changed people in a way that no one could have predicted.
Victorian culture’s expectation that women would be followed when walking was shattered when bicycles became available – it was impossible for a woman to ride a bicycle, and there were too many riders for Victorian men to go to the police.
This also led to the movement of “reasonable clothes”, because the impossibility of cycling in restrictive corsets and skirts led to the creation of more practical dresses.
It’s hard to overstate what a big change it was.
“Let me tell you what I think about riding a bicycle,” Susan B. Anthony told the New York World in 1896. “I think it has done more to liberate women than anything else in the world.”
Such was the famous union between women and cycling that the bicycle became a symbol of the suffrage movement – women rode free from the traditions of Victorian culture on the rise of modern bicycles.
For that, we have the most passionate investors of the 1890s to thank.
Make money like it’s 1999?
In 1999, Warren Buffett warned that disruptive technologies are often destructive to investors who make accurate predictions.
The car industry was one example: “You could have seen in the era of the first cars how this world would have become connected to cars,” he said. he said annual VIP gathering in Sun Valley, ID, “you’d say, ‘This is the place to be.’ But (out of) two thousand (car) companies, as of a few years ago, only three survived…
Pilots were some: “Imagine if you could see the future of the airline industry back there at Kitty Hawk. (you would have decided) that, this is the place to be.”
But “as recently as a few years ago,” he said, “there wasn’t an all-cash investment in the airline industry in history.”
This was Buffett’s way of warning his VIP audience that he may be right that the Internet can change everything – and wrong that investors can benefit from it.
The dotcom bubble started eight months ago.
Today, artificial intelligence is the next world-changing technology to upset investors: they will change everything; but what companies, if any, would take the price they produce remains anyone’s guess.
Crypto and others.
The news this year was very surprising – the SEC went from anti- to pro-crypto, the GENIUS Act legalized stablecoins, the prediction markets went to many regions, the TradFi organizations were rushed to participate – but the prices of the tokens have been surprisingly bad.
This may be because expectations exceeded reality.
But it could also be a sign that, no matter how much profit crypto makes in the end, a fraction of it will be for those who contributed the money.
People enjoy the brand of real things, for example. But if most of the products are tokenized by Robinhood, BlackRock and DTCC, it is a crypto currency that the financial infrastructure that made tokenization possible will not capture much of the value it creates.
Similarly, the crypto industry has given billions of dollars to create evidence without knowledge, and it is easy to imagine how this would be good for the world – it could be the last defense against AI slop.
But they can also be bad for investors: ZK verification is a mathematical algorithm that does not require a trading signal to work.
There are many examples like this – probably because the value that crypto has created has not been able to be captured.
In contrast: Accessible, open, stable cryptos were created to eliminate technical analysts and drop income taxes.
At the end of a disappointing year for token prices, it is tempting to say that crypto is slowly moving towards those goals.
But if crypto is as good for the world as bicycles, no one should worry if it is also bad for investors.
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