Bubble Spotting - British Railways Mania

1,437 views
1,193 views

Published on

Investment Bubbles can happen in just about any sector or commodity - in the mid 1800's the UK experienced a Railway Investment bubble. This presentation (which forms part of a larger series on Market Bubbles) gives a short overview on what happened.

http://bubblespotting.blogspot.com/

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,437
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Bubble Spotting - British Railways Mania

  1. 1. BUBBLE SPOTTING SERIES - 2014 QUICK SUMMARY FORMAT
  2. 2. This short presentation on the English Railway Mania forms part of a larger presentation on Market Bubbles Front page graphic - WIKICOMMONS. -Petar Milošević
  3. 3. BACKGROUND In the late 1830s and early 1840s the British economy slowed down, and interest rates went up. Government bonds became a preferred investment. www.nrm.org.uk
  4. 4. However in the mid 1840s the bank of England dropped the interest rates again. England was in the middle of the industrial revolution, creating an affluent middle class in the process. Government then changed legislation, making it much easier for individuals to invest in companies. www.nrm.org.uk
  5. 5. Railroad companies were punted by media hype as a FOOL PROOF INVESTMENT and a number of Railroad “Investment Opportunities” sprung up left, right and centre. www.nrm.org.uk
  6. 6. Due to many Members of Parliament investing in these schemes, the regulatory control was pretty much laissez-faire OR LACKING.
  7. 7. During those early days, the technology was far from perfected, and it resulted in numerous accidents (as can be seen from this 1931 sketch) www.Nrm.Org.Uk
  8. 8. Between 1844-1846 a total of 6,220 miles (10,010 km) of railway line was constructed (comparatively by the 2000’s the modern UK rail network was only approx. 11,000 miles (18,000 km) long.
  9. 9. In 1845 the Bank of England increased lending rates, which was the end of easy capital.
  10. 10. Some scams were uncovered, which had lured innocent investors to invest their hard earned money in bogus investments.
  11. 11. This, combined with weak operating performance (at least partially as a result of extreme competition between all the various railroad companies), started the snowball effect and funds were withdrawn from railroad companies.
  12. 12. RAILWAY SHARE PRICES
  13. 13. Many investors lost substantial investments.
  14. 14. LIKED IT? Tell a friend - ”Like” or “tweet” this presentation now
  15. 15. English Railway Mania (Bubble) –Sources and further reading http://www.thebubblebubble.com/1929-crash/ http://www.investopedia.com/terms/s/stock-market-crash-1929.asp http://www.reuters.com/article/2008/01/21/us-market-crashesidUSL2126592320080121 http://www3.nd.edu/~jstiver/FIN462/US%20Market%20Crashes.pdf http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
  16. 16. This presentation is provided in the sake of public interest, and has been compiled based on publically available information sources on the web. While great care has been taken in the preparation and compilation of information indicated here, the author does not accept any legal or other liability for any inaccuracy, mistake, misstatement or any other error of whatsoever nature contained herein. This presentation is not investment advice, not a solicitation for any type of investment, financial or otherwise, nor is this presentation an opinion expressed on, nor endorsement of markets, commodities or investments. Any names, trademarks and images are copyright their respective owners and rights in the graphic artwork and photos used in this presentation belongs to, and are courtesy of the respective owners thereof. Unless where otherwise indicated, I don’t claim to have any rights therein.

×