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Engines That Move Markets: Technology Investing from Railroads to the Internet and Beyond
Find the most lucrative markets of the future by looking to the pastSome of the biggest technological innovations in the world have followed similar market and social patterns - scepticism is replaced by enthusiasm; venture capital is supplied; many companies are started and their stocks rise. But as the technology is developed and financial reality sets in, companies disappear, stocks collapse, and naive investors lose money.Through exhaustive research, Alasdair Nairn captures this pattern and examines the impact that some of the greatest technological inventions of the past 200 years have had on financial markets and investors' fortunes. Each chapter explores a different technological innovation, and provides valuable insights on how to apply these lessons to appraise the 'new technology' companies of the future.Some of the key historical episodes examined electric light and its commercial exploitation- the railway boom in Britain and the United States- the development of the automobile industry- the discovery and early development of crude oil- the rise of the PC- the wireless world- the Internet and dotcom bubble.Don't be left behind when the next technological innovation revolutionises the market. With Engines That Move Markets you'll learn how to recognise the familiar patterns unfolding in today's economy so you can profit from these market-shaping events.
600 pages, Kindle Edition
First published December 21, 2001
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Displaying 1 - 18 of 18 reviews
July 10, 2025
I skipped a bunch of the middle sections after railroads because I got the concept and didn’t need the 6 or 7 other industry examples. Good conclusion and synthesis: tech innovation creates bubbles that overfund buildouts. Hard to figure out what companies will survive the culling when investors refocus on fundamentals but it’s always possible to know who is going to be disrupted (eg railroads crush future cash flows from canals).
AI is an interesting wave. Aside from NVIDIA, it’s all happening in private markets (update 7/10/25 - I was wrong about NVIDIA which continues to grow, and a lot of others have started to benefit from the AI shine... and I think in some cases might catch up to valuations based on fundamentals? Time will tell). Privates are better at hiding problems with fundamentals for a lot longer than publics.
A great way to make a ton of money now would be to SPAC eg Anthropic.
AI is an interesting wave. Aside from NVIDIA, it’s all happening in private markets (update 7/10/25 - I was wrong about NVIDIA which continues to grow, and a lot of others have started to benefit from the AI shine... and I think in some cases might catch up to valuations based on fundamentals? Time will tell). Privates are better at hiding problems with fundamentals for a lot longer than publics.
A great way to make a ton of money now would be to SPAC eg Anthropic.
September 27, 2021
Pretty good idea on paper. This guy is too verbose. Book probably could have been 1/5 as long.
- he lacks clarity of thought right up until the last chapter
- book focuses too much on anecdotes, and most of the stories are non-germane to the overall message.
- he lacks clarity of thought right up until the last chapter
- book focuses too much on anecdotes, and most of the stories are non-germane to the overall message.
April 9, 2023
Extremely well researched and detailed. A bit boring to read and a lot of facts make it hard to remember the content. Insights proposed are obvious for anyone working in the tech/startup industry though there are a few golden nuggets here and there.
March 15, 2017
In the end, it's all the same
Right from railroads to radio to tv to internet
Right from railroads to radio to tv to internet
August 7, 2025
Awesome book!
Fun to read.
Insightful.
Helps us understand the current bubble.
Nvidia is inflating a bubble now.
AI is an obvious bubble.
Be cautious.
Fun to read.
Insightful.
Helps us understand the current bubble.
Nvidia is inflating a bubble now.
AI is an obvious bubble.
Be cautious.
September 8, 2024
This is an excellent book that goes deep on the history of investing in technology-driven businesses. Though dry, redundant, and verbose, the book more than makes up for those shortcomings with unique data on equity returns in key technological periods over the last 200 years along with an overview of key events and players in those time periods.
Investing insights are numerous, but perhaps clearest one of all is that investing in early technology businesses is fraught with risk. For example, only 5% of automobile manufactures would have provided adequate returns to an investor during the dawn of the age of automobile (and even Ford hit it big only with his third venture, after failures of two prior ones, and the third business was almost entirely self-financed). Thus, the author concludes, better returns in public markets can be obtained by avoiding investments in businesses disrupted by such technological changes -- "losers" that tend to become apparent much sooner than the real technology "winners." Alternatively, waiting for the period of excess capital to run dry, thereby revealing which companies have the technology, managerial talent, business moat, and financial wherewithal to survive in the downturn can be predictive of higher investment returns.
- "One of the first things that strikes the historian, and struck me at once in my research, was how haphazard the timing and pace of technological development often is. It also soon became clear that the process of capital-raising and the interaction between entrepreneurs, innovators, and financial markets has often followed a bumpy and convoluted path."
- "While in retrospect the winners are usually clear, there is a huge amount of survivorship bias in the data"... Winners of the competitive struggles "are not always those who have the best technology but those who can most clearly see the way that an industry or market is likely to develop [e.g. Amazon]... A company that has the capability to implement the right market strategy can overcome the disadvantage of having technology which is not necessarily superior. Microsoft is perhaps the best-known modern example."
- "Unless the companies involved have patent protection for their products, or are shielded from competition by powerful barriers to entry of another kind (such as a sustainably superior cost curve), the degree of effective competition is probably the single most critical factor in determining how profitable investment in new technologies is going to be. Above-average returns are simply competed away... as a technology company without monopoly protection, excess returns can only be retained by continually reinventing oneself, with all the risks that this involves."
Investing insights are numerous, but perhaps clearest one of all is that investing in early technology businesses is fraught with risk. For example, only 5% of automobile manufactures would have provided adequate returns to an investor during the dawn of the age of automobile (and even Ford hit it big only with his third venture, after failures of two prior ones, and the third business was almost entirely self-financed). Thus, the author concludes, better returns in public markets can be obtained by avoiding investments in businesses disrupted by such technological changes -- "losers" that tend to become apparent much sooner than the real technology "winners." Alternatively, waiting for the period of excess capital to run dry, thereby revealing which companies have the technology, managerial talent, business moat, and financial wherewithal to survive in the downturn can be predictive of higher investment returns.
- "One of the first things that strikes the historian, and struck me at once in my research, was how haphazard the timing and pace of technological development often is. It also soon became clear that the process of capital-raising and the interaction between entrepreneurs, innovators, and financial markets has often followed a bumpy and convoluted path."
- "While in retrospect the winners are usually clear, there is a huge amount of survivorship bias in the data"... Winners of the competitive struggles "are not always those who have the best technology but those who can most clearly see the way that an industry or market is likely to develop [e.g. Amazon]... A company that has the capability to implement the right market strategy can overcome the disadvantage of having technology which is not necessarily superior. Microsoft is perhaps the best-known modern example."
- "Unless the companies involved have patent protection for their products, or are shielded from competition by powerful barriers to entry of another kind (such as a sustainably superior cost curve), the degree of effective competition is probably the single most critical factor in determining how profitable investment in new technologies is going to be. Above-average returns are simply competed away... as a technology company without monopoly protection, excess returns can only be retained by continually reinventing oneself, with all the risks that this involves."
August 20, 2025
Started to get interesting when talk about the internet.
Cars , trains, telecommunications, radio, were all very far. But is still interesting read as these define the “growth stocks” that capture the imagination of the investors , and talk story to justify or to make the sky high PE reasonable.
Some was unethical where the accounting books were not disclosed and operated in a Ponzi scheme kind of way.
No revenue and no promises just based on valuation and SPAC are empty air and empty promises.
The asset price or value is dependent on the cash flow and profit the asset generates. Other is the greater fools or the hope of perfect execution of aggressive growth and moat protected profit.
Is the profit can be protected long term? Only monopoly. Or patent protection. Else the commoditize of product and service and increase of competition will soon made the profit miniscule. No brand loyalty and premium over the standardized commodized products.
In certain smaller niche market you may have the chance to do price discrimination.
But with internet and online stores and china manufacturing power, standard product price is dropping and transparency.
Anyway
It is an inspired good read especially the ending chapters.
Too much story up front to replicate the same boom and bust cycles.
Perhaps the relax of credit , lowering of interest rates , is the main driver of stock market drive.
The government policy support, adding the new trend , adding the new technology, fueling by media frenzy and attention, will drive the asset price into unreasonable height. Profit or not, good company can still be a bad price tag. (Too expensive).
Cars , trains, telecommunications, radio, were all very far. But is still interesting read as these define the “growth stocks” that capture the imagination of the investors , and talk story to justify or to make the sky high PE reasonable.
Some was unethical where the accounting books were not disclosed and operated in a Ponzi scheme kind of way.
No revenue and no promises just based on valuation and SPAC are empty air and empty promises.
The asset price or value is dependent on the cash flow and profit the asset generates. Other is the greater fools or the hope of perfect execution of aggressive growth and moat protected profit.
Is the profit can be protected long term? Only monopoly. Or patent protection. Else the commoditize of product and service and increase of competition will soon made the profit miniscule. No brand loyalty and premium over the standardized commodized products.
In certain smaller niche market you may have the chance to do price discrimination.
But with internet and online stores and china manufacturing power, standard product price is dropping and transparency.
Anyway
It is an inspired good read especially the ending chapters.
Too much story up front to replicate the same boom and bust cycles.
Perhaps the relax of credit , lowering of interest rates , is the main driver of stock market drive.
The government policy support, adding the new trend , adding the new technology, fueling by media frenzy and attention, will drive the asset price into unreasonable height. Profit or not, good company can still be a bad price tag. (Too expensive).
January 23, 2025
1. Canals
Enabled by improvements in engineering and transport demand
Raised billions in public
Replaced by railroads
2. Railroad
Enabled by steam engine
Raised public money, stock bubble
Successful technology, overvalued investments
3. Telegraph + Telephone
Enabled by engineering advances
Patent holding companies raised capital
AT&T: Good investment
4. Light
Whale oil, gas, kerosene, arc electricity, incandescent lamp
Edison needed to overpromise to raise capital
GE: Good investment
5. Oil
Motivated by kerosene demand
Oil companies are easy to start, but require continuous reinvestment and cyclical. Std Oil acquires competitors during busts
Std Oil: good investment
6. Automobiles
Lots of competitors, all needed to raise capital
Easier to find losers than pick winners
7. Radio
Invented by Marconi (Nobel Prize)
Several competitors, some with better technology
Ultimate winner was American Marconi, but was nationalized into RCA during WW1
8. Computing
Funding came from government due to demand for taxation and ballistics
Many good investments that used public money
9. PC
10. Internet
Enabled by improvements in engineering and transport demand
Raised billions in public
Replaced by railroads
2. Railroad
Enabled by steam engine
Raised public money, stock bubble
Successful technology, overvalued investments
3. Telegraph + Telephone
Enabled by engineering advances
Patent holding companies raised capital
AT&T: Good investment
4. Light
Whale oil, gas, kerosene, arc electricity, incandescent lamp
Edison needed to overpromise to raise capital
GE: Good investment
5. Oil
Motivated by kerosene demand
Oil companies are easy to start, but require continuous reinvestment and cyclical. Std Oil acquires competitors during busts
Std Oil: good investment
6. Automobiles
Lots of competitors, all needed to raise capital
Easier to find losers than pick winners
7. Radio
Invented by Marconi (Nobel Prize)
Several competitors, some with better technology
Ultimate winner was American Marconi, but was nationalized into RCA during WW1
8. Computing
Funding came from government due to demand for taxation and ballistics
Many good investments that used public money
9. PC
10. Internet
February 24, 2025
This book is packed with information and threads, yet the connections between the ideas are a bit disjointed and not always clearly defined, particularly in Chapter 2. Considering the history of tech investment is inherently rather loose...there is space for perspectives and narratives.
While it could have been more compelling, the book unfortunately doesn’t offer a strong or subtle framework to tie together the many strands of the tech investment world. For me, it’s not easy to gain a deeper understanding, as I found myself spending more time trying to piece the logic together.
However, I would still like to thank the author for the work. Simply bringing all this information together is no small feat. Tech investment history doesn't seem to have been explored (in this way) by many, so this is, already an important start.
While it could have been more compelling, the book unfortunately doesn’t offer a strong or subtle framework to tie together the many strands of the tech investment world. For me, it’s not easy to gain a deeper understanding, as I found myself spending more time trying to piece the logic together.
However, I would still like to thank the author for the work. Simply bringing all this information together is no small feat. Tech investment history doesn't seem to have been explored (in this way) by many, so this is, already an important start.
December 2, 2024
thoughts:
- comprehensive, does a good job of balancing both a sweeping range of history and doing deep dives into individual companies along the way
- reasonably entertaining to read, but definitely feels a bit like a wikipedia article at times
- i don't like the structure: it's ~500 pages of history overview followed by ~50 pages of quickly slapped together meta analysis. I wish the thesis had been placed at the front.
- comprehensive, does a good job of balancing both a sweeping range of history and doing deep dives into individual companies along the way
- reasonably entertaining to read, but definitely feels a bit like a wikipedia article at times
- i don't like the structure: it's ~500 pages of history overview followed by ~50 pages of quickly slapped together meta analysis. I wish the thesis had been placed at the front.
June 13, 2024
Strongly suggest this book for anyone investing in growth equities or any growth sector today. History teaches us so much of how to analyze the world we experience today, how to be skeptical of MSM, of hype, and how to be diligent. And what strategies over the course of many cycles are best positioned to succeed.
January 17, 2025
Recommended by Philippe Laffont at Coatue
A bit academic but good overview of past tech cycles and key learnings. Read the updated 2018 version which includes tech bubble fallout. I don't agree with everything as some assertions and critiques of the large cap internet companies have been since proved wrong.
A bit academic but good overview of past tech cycles and key learnings. Read the updated 2018 version which includes tech bubble fallout. I don't agree with everything as some assertions and critiques of the large cap internet companies have been since proved wrong.
May 31, 2022
The history, content, and delivery was great. The writing was a bit long winded at times and I found myself drudging through a few chapters. I Would recommend this book to anyone looking for a thorough analysis of the technologies and innovations that shape our world.
December 12, 2024
Excelente repaso de los grandes cambios tecnologicos desde la Rev Industrial (tren, generacion electricidas, industria automovil, petroleo, pc etc). Al final hay muchos paralelismo entre varios de los casos y se pueden sacar conclusiones para la burbuja actual de la IA y otras futuras.
July 1, 2021
Too much like a textbook
May 29, 2022
Pretty amazing book highlighting the major technological breakthroughs in history. If someone wants to abstract what tech revolutions have in common, its a great starting point.
Want to read
July 20, 2024
April 6, 2022
Investors tend to over-estimate tech impact in the short-run but under-estimate same in the long.
Displaying 1 - 18 of 18 reviews