TIP777: The 1999 Dot-Com Bubble w/ Clay Finck
We Study Billionaires - The Investor’s Podcast Network
Skilling, Fastow and the Rise of LJM
Clay explains Andrew Fastow's SPVs, conflicts of interest, and how off‑balance‑sheet schemes hid losses.
In this episode, Clay explores the dot-com boom and bust through Roger Lowenstein’s book, Origins of the Crash. The book unpacks how distorted incentives, financial engineering, and speculative excess reshaped markets. By studying this period in market history, investors can better recognize recurring patterns in behavior, incentives, and speculation, and apply those lessons to avoid future manias.
IN THIS EPISODE YOU’LL LEARN: 00:00:00 - Intro 00:03:33 - Why stock options often misalign executives and long-term shareholders 00:08:51 - How financial engineering was abused in the 1990s market boom 00:12:45 - How distorted incentives fueled the dot-com bubble 00:27:51 - Why revolutionary technologies don’t guarantee successful investments 00:31:47 - The role Wall Street analysts and the media played in amplifying speculation 00:39:19 - How Enron’s deception exposed systemic failures in governance and oversight 01:11:34 - Clay’s lessons for avoiding hype-driven bubbles in the future
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
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- Roger Lowenstein’s book: Origins of the Crash.
- Mentioned Episode TIP693: The Power Law: Unlocking Venture Capital's Secrets w/ Clay Finck.
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