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Backtest

Backtest

By: Daniel Gamboa Matt Harris
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 Learn from market history

www.backtestpodcast.comDaniel Gamboa Economics Personal Finance World
Episodes
  • The Shale Revolution: George Mitchell’s Natural Gas Moonshot (Part 1)

    The Shale Revolution: George Mitchell’s Natural Gas Moonshot (Part 1)
    Nov 25 2025
    George Mitchell and his team—people like Nick Steinsberger—through relentless experimentation and financial pressure targeted natural gas in the Barnett Shale and unlocked generations of US energy supply. The question was less, “is the gas there?” and more “can it be produced economically?”By answering that question they changed the US natural gas market, global geopolitics, and the daily life of everyday Americans.In this episode we tell the story of George Mitchell, the son of Greek immigrants who clawed his way from financial hardship in Galveston to build a multi-billion dollar energy business—first by using his technical skills to find natural gas others missed, then by signing a pivotal long-term contract to feed Chicago’s growing demand. That deal generates substantial cash flow, but it also becomes a ticking time bomb: as US gas markets lurch through decades of regulation, shortages, and deregulation, Mitchell’s core field starts to run out, and the company faces the real prospect of defaulting on its obligations.Backed into a corner, Mitchell bets the future of his firm on the Barnett Shale—rock that industry experts say can’t be produced economically. We follow two decades of failed experiments, internal skeptics, and near-disaster until a young engineer, Nick Steinsberger, stumbles into a cheaper way to frack wells and finally cracks the code that turns the Barnett from science project into scalable resource.Along the way, we zoom out to the larger gas market: how postwar pipeline build-outs, 1970s energy crises, and 1980s deregulation set the stage for Mitchell’s moonshot—and why this quiet breakthrough in North Texas is the reason today’s AI data centers, power grids, and geopolitics have the luxury of assuming abundant US energy supply.Chapters(01:07) Excerpt from The Frackers(02:30) The US supply of energy for AI was unlocked by the Shale Revolution(06:40) George Mitchell’s childhood(11:21) George and Johnny Mitchell start Oil Drilling Co(14:05) Finding the Boonsville Bend gas field(20:30) The market for Boonsville gas & signing the Chicago contract(25:00) US natural gas markets through the decades(30:30) Mitchell Energy goes public(33:15) The decline of gas reserves from Boonsville leads to Barnett experiments(34:21) Shale geology versus conventional formations(42:22) Mitchell Energy sued by landowners(47:10) Bill Stevens, COO of Mitchell Energy, skeptical of the Barnett project(48:10) Chevron’s Barnett project(52:20) Nick Steinsberger stumbles into an insight & unlocks the code(59:30) Mitchell Energy tries to sell itself, fails, then succeeds(01:04:31) Lessons learnedReferencesThe Frackers: The Outrageous Inside Story of The New Billionaire Wildcatters by Gregory Zuckerman (Link)George P. Mitchell: Fracking, Sustainability, and an Unorthodox Quest to Save the Planet by Loren C. Steffy (Link)A Retrospective Review of Shale Gas Development in the United States: What Led to the Boom? By Zhongmin Wang and Alan Krupnick, 2013 (Link)Windfall: How the New Energy Abundance Upends Global Politics and Strengthens America’s Power by Meghan L. O’Sullivan (Link) This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.backtestpodcast.com
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    1 hr and 12 mins
  • The Dot Com Boom: Max Levchin, Peter Thiel, and Elon Musk Walk into the Fire and Create PayPal (Part 4)

    The Dot Com Boom: Max Levchin, Peter Thiel, and Elon Musk Walk into the Fire and Create PayPal (Part 4)
    Oct 30 2025

    Imagine starting a company to change the world of finance right before an epic stock market crash.

    Elon Musk famously said that PayPal wasn’t a hard company to create. It was a hard company to keep alive.

    In 1999, three future titans of technology—Max Levchin, Peter Thiel, and Elon Musk—charge straight into the blaze to bring payments and finance into the internet age. This is the story of how a handful of brilliant founders and their team navigate from crisis to crisis, face constant near-failure, and create the first successful internet payments solution. From the wreckage of the dot com bubble, they emerged refined—the founders, investors, and builders who would go on to shape the next two decades of Silicon Valley—and a lot of the world we live in today.

    Chapters

    (01:20) Mr. Buffett on the Stock Market

    (02:17) The stock market in 1999

    (05:21) Intro to Max and Peter

    (09:49) Intro to Elon

    (15:45) Why they choose to do startups this late in the cycle

    (20:51) Insight of eBay as a perfect market for p2p payments

    (22:51) Competition between Confinity and X

    (26:55) Confinity and X merge

    (34:09) Novel business model & technology innovation

    (37:29) The stock market crash dynamics

    (43:25) How PayPal navigates post-9/11 slump with an IPO

    (48:42) The PayPal Mafia

    (50:40) Nature vs. nurture

    (54:02) Takeaways on market timing

    (55:24) The internet delivered on its promise

    References

    The Founders: The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley by Jimmy Soni (Link)

    The PayPal Wars: Battles with Ebay, the Media, the Mafia, and the Rest of Planet Earth by Eric M. Jackson (Link)

    PayPal S-1 Filing in 2002 (Link)

    Mr. Buffett on the Stock Market, Nov. 22nd 1999 (Link)



    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.backtestpodcast.com
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    59 mins
  • The Dot Com Boom: Bezos Sees the Wave, Rides the Crest, Survives the Crash (Part 3)

    The Dot Com Boom: Bezos Sees the Wave, Rides the Crest, Survives the Crash (Part 3)
    Oct 17 2025

    Technology waves are easy to see in hindsight, but often hard to see before they arrive. It’s even harder to build enough conviction to take a risk, ride the wave, and build something great.

    Jeff Bezos did just that. And while the Amazon story has been told many times, it’s fascinating to think about what he saw that gave him the confidence to leave his comfortable Wall Street job to start Amazon.

    How did he see the wave before most people, and what gave him the conviction to go for it? We cover his key relationship with David Shaw, his market research, and his regret minimization framework.

    Famously, Amazon focused on books and grew like a rocket ship. How did they navigate the hype cycle and the dot com mania? Was their approach to investing during the boom the right approach? What can we learn from how they navigated the crest at the height of the bubble?

    Finally, we ask maybe the most important question of all—how did Amazon survive? What were the market conditions they had to navigate? Did they do anything specific to position themselves or did they just get lucky?

    Chapters

    (01:20) Increasing return games

    (05:38) Jeff Bezos’s background

    (10:27) Market backdrop in the late 1980s, early 1990s

    (13:54) Jeff Bezos meets David Shaw

    (16:47) How Jeff Bezos sees the wave and builds conviction

    (32:22) How Amazon navigates the wave

    (35:25) Joy Covey hired as CFO

    (36:27) Amazon’s investment philosophy during the boom

    (42:40) How Amazon survives the crash

    (44:25) Amazon’s financings

    (49:41) The market crash and Amazon’s reaction

    (52:50) Why did Amazon survive?

    (57:50) See the wave, ride the crest, survive the crash

    References

    The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

    Invent & Wander: The Collected Writings of Jeff Bezos

    Amazon SEC filings & shareholder letters from 1996-2002

    “Riding the Perilous Waters of Amazon.com” by Peter de Jonge, New York Times Magazine, published on March 14, 1999 (link)

    Increasing Returns and the New World of Business by W. Brian Arthur (link)

    2,300x web growth from ‘93-’94, John Quartermann, Matrix News, Vol. 4, No. 2 (link)

    Acquired Episodes (History, Tom Alberg)



    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.backtestpodcast.com
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    1 hr
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