Investing Scams Aren’t New: 5 Lessons from the Great British Bicycle Bubble

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If you’ve been an investor for a few decades, you’re probably familiar with the great Internet bubble that burst in early 2000, severely shrinking many portfolios. (The S&P 500 fell by 9.1% that year, followed by drops of 11.9% and 22.1%, respectively, in the next years.) That was followed by a housing bubble that began bursting in 2006, contributing to a 37% drop in the S&P 500 in 2008.

Financial bubbles bursting aren’t anything new, as readers of financial history know. There was a very famous tulip bubble, of all things, in Holland in the 1600s. Few, though, know about the also-impressive bicycle bubble in Britain in the 1800s. It’s one of many bubbles detailed in the new book Boom and Bust: A Global History of Financial Bubbles by William Quinn and John D. Turner.

Man in office clothes in action over a bike, possibly about to fall.

Image source: Getty Images.

Here’s a look at some aspects of the bicycle bubble, along

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Bicycle retailers emerging as the winners from the coronavirus crisis

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Last March when one European country after another went to lock down and after toilet paper and sanitisers had sold out; people turned shopping out fitness and sports equipments. Some shops ran out of home fitness machines and accessories. As public transport had also become a “death trap” bicycle, that combines fitness, transportation and social distancing became one of the most wanted item.

Helkama, had one of the best years of their history. Sales of bicycles increased dramatically in Finland. “All types of bikes have sold out, including electric bikes.” Harri Halme, sales director of Helkama told Helsinki Times. “ There are only few models left in warehouses.” 

Helkama is a finnish bicycle manufacturers and importer. In addition to its own popular Helkama bikes, the company is the distributor of few other models manufactured in different countries. Halme says that Helkama’s  revenue has increased 60% compared to last year.

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Investing Scams Aren’t New: 5 Lessons from the Great British Bicycle Bubble | Personal-finance

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The great British bicycle bubble, in a nutshell

Bicycles had been around for a long time, but it was only in the late 1800s that they became extremely popular — due in large part to improvements made to them, such as pneumatic tires that offered smoother rides and chains to provide leverage without requiring a huge front wheel.

As the prevalence of bikes increased, so did business activity related to bikes. Birmingham was a center for cycling, and bicycle manufacturers there numbered 72 in 1889 — with that number surging to 177 by 1895, per Quinn and Turner. They also note that patents related to bicycles went from 595 in 1890 to 4,269 by 1896, and they ended up representing 15% of all new patents issued.

During this boom, there was a frenzy of investing in bicycle companies, with some investors getting rich and many investors losing their shirts. There

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A view of Palestine from a bicycle seat

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Fifty Miles Wide: Cycling Through Israel and Palestine by Julian Sayarer, Arcadia Books (2020)

Julian Sayarer is not a person who lacks ambition.

In his twenties, he broke the 18,000-mile world record for cycling around the world. With a background in political science and a passion for travel, he has written multiple books, many of which have won awards. And at the advice of an Israeli writer he met at the Edinburgh International Book Festival, he decided to take on what many see as being the most divisive political situation in the world – that of Israel-Palestine.

On a bicycle.

Many readers of The Electronic Intifada may lose interest at this point. What, after all, can a relatively young writer tell them about a situation to which they are deeply connected? What can a do-gooding outsider bring to the table, spinning through the country on two wheels while dressed in

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