Engines that move markets

What Hacker News says

1. nvartolomeiJan 2025
   *Engines That Move Markets: Technology Investing from Railroads to the Internet and Beyond* by Alasdair G. M. Nairn

   I’ve had a few aha moments while reading this book. Although it's primarily written from an investor's perspective, it does contain a fair share of insight about creation and commercialisation of technology, the mechanics of monopolies, government involvement, foreign affairs, etc.

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2. stonlybJan 2025
   81. Failure is Not an Option by Gene Kranz

   82. Mrs. P’s Journey by Phyllis Pearsall

   83. River of Doubt by Candice Millard

   84. Longitude by Dava Sobel

   85. Dreaming in Code by Scott Rosenberg

   86. The Last Viking - A biography of Roald Amundsen

   87. The Wager by David Grann

   88. Simply Fly by Captain G. R. Gopinath

   89. Engines That Move Markets by Alasdair G. M. Nairn

   90. The Education of Cyrus by Xenophon

   91. Boyd: The Fighter Pilot Who Changed the Art of War by Robert Coram

   92. Madhouse at the End of the Earth by Julian Sancton

   93. How to Make a Spaceship by Julian Guthrie

   94. West with the Night by Beryl Markham

   95. The Age of Uncertainty by Tobias Hürter

   96. American Steel by Richard Preston

   97. Showstopper by G. Pascal Zachary

   98. Eccentric Orbits by John Bloom

   99. The Great Bridge by David McCullough

   100. Loonshots by Safi Bahcall

   101. The Art of Doing Science and Engineering by Richard Hamming

   102. Where Wizards Stay Up Late by Katie Hafner

   103. The Evening Star by Henry S. F. Cooper

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3. hogFeastJan 2020
   Engines that move markets by Alisdair Nairn
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4. hogFeastSep 2019
   One story probably sums the total of my knowledge on this: when John Templeton was in his 80s, a billionaire, had been crushing it for five decades, he was researching the effect of planetary cycles and horoscopes on the market.

   I know a few people who managed money with him in Nassau at this time. He wasn't senile. So what was he doing? He was willing to test his beliefs...about everything. He could put aside everything he thought he knew even after five decades of success and ask one simple question: what works?

   Now ask the 30-year old BSD "crushing it bro" dude with the CFA and name brand fund manager on his CV about horoscopes. He will tell you it doesn't work but he won't be able to tell you how he know this (in most cases, he won't even understand the distinction between his thoughts and reality).

   Most people in the industry know all the facts. They act very professionally at all times when talking seriously with the peers about their many opinions (none of them tested). They don't look at history, they don't look at what works, they don't look at their own decisions (usually, some good funds impose this on managers), they can't think creatively about risk, and they don't know the one or two facts that are important in a big woodpile of information.

   One answer that history suggests, in addition to the above, is that this always occurs. This has been happening for hundreds of years. But no-one cares. This time it is different, I am special, I am unique, I have been chosen, etc. (if anything, changes in attitudes have made this thinking even more pervasive...young people are even more individualistic and education institutions generally encourage an indulgent self-image).

   Btw: I have (unfortunately) read most books about investment. I am aware of only one book aimed at investors that actually looks at this effect at large (i.e. what is the relationship between technology and markets? why actually works? what has happened in these situations before? etc.): Engines that Move Markets. One book. A million books about speculation and bubbles...but how many books about actual markets, actual technology, and actual investment...one.

   The closest is possibly Capital Returns and Capital Account from Marathon...but this is really just a narrative account of two decades. In terms of a "big theory" historical view, there is only one book. That fact alone should demonstrate how utterly disinterested the industry is in anything approaching knowledge (so none of the questions that you pose really matter...no-one cares).

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5. Fade_DanceSep 2025
   >"Tech enthusiasm always runs ahead of tech realities," according to Michael Parekh, a former analyst at Goldman Sachs

   This is more true now than ever. The fact that companies with thin floats trade a few shares at high prices (which is then multiplied to the entire float to generate a "billion dollar" market cap) is a well rehersed game these days, in both private and public markets. Even retail investors generally understand this (not always). It's "priced in" to some extent.

   >One lesson from history is that, when tech bubbles burst, leading firms often give way to upstarts. “The biggest and most successful lighting companies all experienced a change of control when cashflow became an issue,” wrote Alasdair Nairn in “Engines That Move Markets”, a history of the late 19th century. Many firms that dominated the early days of railways, the telegraph and the telephone were also quickly supplanted. Who now remembers Vulcatron, from America’s electronics bubble of the 1960s, or Corning, a household name during the dotcom boom? It will be a miracle if, in a decade or so, all of the “magnificent seven” listed tech firms, and the biggest AI startups, still exist.

   I have a somewhat hard time following the logic here. History rhymes but it isn't necessarily a blueprint. If the "AI bubble" bursts to the extent that Meta/Google/Amazon lose their position, that means it's a fairly catastraughic scenario, considering they have fortress balance sheets and pseudo-monopolies that are being actively defended by their government (US red lines vs digital services taxes in trade negotiations). It would obviously mean that their AI datacenter investments are kaput, but if that's the case, then the Coreweaves and Nebiuses and definitely the VC sky high valuations are coming down 10x if not 100x as hard.

   Therefore the conclusion here is that the upstarts are lurking in the metaphorical startup-garages, while the bubble inflates outside. Maybe true, but it sure seems like recency bias anchored to the DotCom narrative, which may or may not play out again. I'd personally argue that the 2020 unwind of unprofitable tech with 10 billion dollar smart-treadmill companies, 100 (sorry, 160) billion dollar video chat software, 10B space tourism, and $90 billion dollar EV companies (lucid motors), was this generation's blindingly obvious DotCom bust.

   >Many firms that dominated the early days of railways, the telegraph and the telephone were also quickly supplanted. Who now remembers Vulcatron, from America’s electronics bubble of the 1960s, or Corning, a household name during the dotcom boom? It will be a miracle if, in a decade or so, all of the “magnificent seven” listed tech firms, and the biggest AI startups, still exist.

   This is what seems like the biggest grey swan, but the AI tangent is almost secondary to the driving factor, which is index concentration and the reflexive feedback loop which drives more and more passive dollars to the biggest companies. The historical parallel here was oddly not even named in the article, which is the Nifty Fifty bubble in the mega-conglomerates in the 70s.

   What happened is their internal flywheel became a drag instead of a boost, and this was a natural result of a reversal of the forces that drove them to the top (high equity valuation, high growth/economic conditions they could harness). Some of the new financial engineering in the AI world (debt flywheels securitized by GPUs and future locked in revenue) has some obvious risks, but when it comes to the hyperscalers like Google and Amazon, we have to be aware that they have enormously resilient balance sheets. The likely outcome is a big valuation re-rate. Say the 27x PE comapnies move to 15x.

   >Should Digital God fail to arrive, the fall will be brutal.

   I'm not entirely convinced? The case they laid out seems to be potentially contained explosions. Pensions could be hurt. Family offices, definitely. It wouldn't be fun, but I'm not sure it would equal even the DotCom bust (speaking as someone who saw the financial ruin of destroyed Dotcom companies/hero to zero teleportation firsthand). I think the stock concentration bubble is the more obvious risk, but if that goes down, that portends wider economic pain that arguably overshadows the AI downturn. Indeed, the AI narrative may simply lose focus, and continue building without hype (maybe it will even be treated with disdain in the investing space), while a wider economic slowdown emerges.

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6. credditJan 2025
   The biggest question on such investment from my POV, is what do the Deepseek results mean about the usefulness/efficiency of this investment?

   I've been meaning to read a relevant book to today's times called Engines That Move Markets. Will probably get it from the library.

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