We Study Billionaires - The Investor’s Podcast Network TIP802: When Genius Was Just Luck: The Go-Go Years w/ Kyle Grieve
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Mar 27, 2026 A dive into the 1960s speculative boom, highlighting euphoria, leverage and financial engineering. Stories of outsized IPO multiples, fraudulent growth schemes and forced sell-offs illustrate market distortions. Also covers momentum-driven performance chases, conglomerate accounting tricks and how incentives warped decision-making.
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Ross Perot's EDS IPO Frenzy
- Ross Perot founded EDS from an IBM salesman background and priced its IPO at roughly 118x earnings with Ken Langone's help.
- Despite a 50–60% one-day crash in 1969, Perot treated it abstractly because earnings kept doubling and the business fundamentals remained strong.
Avoid Leverage Trap
- Avoid leverage because forced selling during drawdowns converts temporary paper losses into permanent ones.
- Edward Gilbert used margin to corner stocks, stole funds to cover margin, and ended up imprisoned after Blue Monday wiped him out.
Don't Publicize Your Positions
- Don't share stock tips with friends who might act impulsively because they may take large margin positions you wouldn't.
- Gilbert encouraged friends to buy his ideas, causing collective margin squeezes that amplified his collapse.
