When Genius Failed
The Rise and Fall of Long Term Capital Management
by:
Roger Lowenstein
in:
Investing
Summary:
The book chronicles the spectacular rise and catastrophic collapse of the hedge fund Long-Term Capital Management (LTCM), which was founded by Nobel Prize-winning economists and renowned Wall Street traders. It delves into the fund's complex financial strategies, the unchecked leverage that led to its downfall, and the massive bailout orchestrated by the Federal Reserve to prevent a global financial crisis.
Key points:
1. Mathematical Model Overconfidence: The book warns against relying too much on mathematical models for financial decisions, as seen in the collapse of hedge fund LTCM.
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