In 1979, a young Frenchman, Thierry Sabine, founded an institution when he organised the first "rallye-raid" from Paris to Dakar, in Senegal, the event now called the Dakar Rally. From amateur beginnings it quickly became a massive commercial circus catering for cars, motorcycles and trucks, and spawned other similar events. Since 2008, it has been held in South America.
The causes and characteristics of rallies vary, but most financial theorists agree that economic cycles and investor sentiment both play a role in the creation and momentum of rallies. In general, information about a strong or strengthening economy, indicated by high employment, high disposable income, low inflation and high business profits usually ushers in a rally. The existence of several new trading highs for well-known companies also indicates a rally is occurring. It is important to note that government involvement affects rallies: Changing the federal funds rate or tax rates indirectly encourages economic expansion or contraction.
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“Ask anyone to name a rally driver and the first name that comes to mind is invariably Colin McRae,” said Silverstone’s Adam Rutter. “He was always a favourite among rally fans but his incredible success also made him a household name.” The auction house expects this very Focus to sell for between £120,000 and £140,000, or about $170-200k when the gavel drops on February 23.
When rallying really took off in the ’80s and ’90s it spawned a new type of performance car. These cars were built for tarmac and mud stages, so their road-going cousins were naturally well-suited to real world conditions. What’s more, they often had four doors, plenty of legroom and a boot (trunk) in the back. And the best bit? Pretty much anyone could buy one and, depending on how deep your pockets were, become Blomqvist, McRae, or Mäkinen.
Rallying was again slow to get under way after a major war, but the 1950s were the Golden Age of the long-distance road rally. In Europe, the Monte Carlo Rally, the French and Austrian Alpines, and the Liège were joined by a host of new events that quickly established themselves as classics: the Lisbon Rally (Portugal, 1947), the Tulip Rally (the Netherlands, 1949), the Rally to the Midnight Sun (Sweden, 1951, now the Swedish Rally), the Rally of the 1000 Lakes (Finland, 1951 – now the Rally Finland), and the Acropolis Rally (Greece, 1956). The RAC Rally gained International status on its return in 1951, but for 10 years its emphasis on map-reading navigation and short manoevrability tests made it unpopular with foreign crews. The FIA created in 1953 a European Rally Championship (at first called the "Touring Championship") of eleven events; it was first won by Helmut Polensky of Germany. This was the premier international championship until 1973, when the FIA created the World Rally Championship for Manufacturers, won that first year by Alpine-Renault. Not until 1979 was there a World Rally Championship for Drivers, won that year by Björn Waldegård.
Rising investor confidence also indicates a rally, and it is perhaps more powerful than any economic indicator because when investors believe something is going to happen (a rally, for example), they tend to take action (purchasing shares in order to profit from expected price increases) that actually turn expectations into reality. Although it is an objective concept, investor sentiment shows through in mathematical measurements such as the put/call ratio, the advance/decline line, IPO activity, and the amount of outstanding margin debt.