When Genius Failed: The Rise and Fall of Long-Term Capital Management
By Roger Lowenstein
Category
InvestingRecommended by
"When Genius Failed" by Roger Lowenstein is a gripping and meticulously researched account of the rise and fall of Long-Term Capital Management (LTCM), a hedge fund founded by renowned economists and Nobel laureates.
The story begins with the brilliant minds behind LTCM, who believed they had cracked the code to predict financial markets and yield consistent profits. Their quantitative approach and complex mathematical models seemed infallible, attracting investors from all corners of the financial world.
However, as the book unfolds, it becomes clear that LTCM's strategies were highly risky and heavily leveraged, exposing them to catastrophic losses. The Russian debt crisis of 1998 sent shockwaves through global markets, which LTCM failed to anticipate. Their investments plummeted, sending the firm into a downward spiral of insurmountable losses.
Lowenstein deftly illustrates the greed, hubris, and herd mentality that contributed to LTCM's downfall. He delves into the personal lives and personalities of the key players, revealing how their brilliance and arrogance ultimately led to their undoing.
The author skillfully explains complex financial concepts and paints a vivid picture of the events leading up to LTCM's unraveling. He also delves into the role of regulators and central banks, who ultimately intervened to prevent a full-blown financial crisis.
"When Genius Failed" serves as both a cautionary tale and a fascinating study of human nature. It reminds us that even the most brilliant minds can falter, and that the risks associated with complex financial instruments should never be underestimated.
Throughout the book, Lowenstein keeps readers on the edge of their seats, offering valuable lessons about risk management, excessive leverage, and the dangers of unchecked egos. "When Genius Failed" is a must-read for anyone interested in finance, investing, or the inherent fallibility of the human mind in the face of financial markets.
The story begins with the brilliant minds behind LTCM, who believed they had cracked the code to predict financial markets and yield consistent profits. Their quantitative approach and complex mathematical models seemed infallible, attracting investors from all corners of the financial world.
However, as the book unfolds, it becomes clear that LTCM's strategies were highly risky and heavily leveraged, exposing them to catastrophic losses. The Russian debt crisis of 1998 sent shockwaves through global markets, which LTCM failed to anticipate. Their investments plummeted, sending the firm into a downward spiral of insurmountable losses.
Lowenstein deftly illustrates the greed, hubris, and herd mentality that contributed to LTCM's downfall. He delves into the personal lives and personalities of the key players, revealing how their brilliance and arrogance ultimately led to their undoing.
The author skillfully explains complex financial concepts and paints a vivid picture of the events leading up to LTCM's unraveling. He also delves into the role of regulators and central banks, who ultimately intervened to prevent a full-blown financial crisis.
"When Genius Failed" serves as both a cautionary tale and a fascinating study of human nature. It reminds us that even the most brilliant minds can falter, and that the risks associated with complex financial instruments should never be underestimated.
Throughout the book, Lowenstein keeps readers on the edge of their seats, offering valuable lessons about risk management, excessive leverage, and the dangers of unchecked egos. "When Genius Failed" is a must-read for anyone interested in finance, investing, or the inherent fallibility of the human mind in the face of financial markets.
Share This Book 📚
More Books in Investing
Poor Charlie's Almanack
Charlie Munger
Antifragile
Nassim Nicholas Taleb
Skin In The Game
Nassim Taleb
Thinking In Bets
Annie Duke
Security Analysis
Benjamin Graham
The Dao of Capital
Mark Spitznagel
The Intelligent Investor
Benjamin Graham
The Psychology of Money
Morgan Housel
When Genius Failed
Roger Lowenstein
Bitcoin Billionaires
Ben Mezrich
Secrets of Sand Hill Road
Scott Kupor
The Black Swan
Nassim Taleb
The Most Important Thing
Howard Marks
The Success Equation
Michael Mauboussin
Charlie Munger
Tren Griffin
Expectations Investing
Michael Mauboussin
Fooling Some of the People All of the Time
David Einhorn
Layered Money
Nik Bhatia
Manias, Panics, and Crashes
Robert Aliber
Market Wizards
Jack Schwager
Mastering The Market Cycle
Howard Marks
Money
Tony Robbins
More Than You Know
Michael Mauboussin
Reminiscences of a Stock Operator
Edwin Lefevre
Stress Test
Timothy Geithner
The (Mis)Behavior of Markets
Benoit Mandelbrot
The Alchemy of Finance
George Soros
The Essays of Warren Buffett
Lawrence Cunningham & Warren Buffett
The Most Important Thing Illuminated
Howard Marks
The Tao of Charlie Munger
David Clark
Popular Books Recommended by Great Minds 📚
7 Powers
Hamilton Helmer
Dune
Frank Herbert
American Kingpin
Nick Bilton
Extreme Ownership
Jocko Willink
Creativity, Inc.
Ed Catmull
Thinking, Fast and Slow
Daniel Kahneman
Mindset
Carol Dweck
Principles for Dealing With The Changing World Order
Ray Dalio
Can't Hurt Me
David Goggins
When Breath Becomes Air
Paul Kalanithi
The Moment of Lift
Melinda Gates
The Hard Thing About Hard Things
Ben Horowitz
Homo Deus
Yuval Noah Harari
The Outsiders
William Thorndike
The Great CEO Within
Matt Mochary
Siddhartha
Hermann Hesse
High Output Management
Andrew Grove
Sapiens
Yuval Noah Harari
Foundation
Isaac Asimov
The Ride of a Lifetime
Bob Iger
The Fountainhead
Ayn Rand
The Undoing Project
Michael Lewis
Only the Paranoid Survive
Andy Grove
Economics in One Lesson
Henry Hazlitt
Guns, Germs, and Steel
Jared Diamond
The Almanack of Naval Ravikant
Eric Jorgenson
Hopping Over The Rabbit Hole
Anthony Scaramucci
Originals
Adam Grant
The Lessons of History
Will & Ariel Durant
Red Notice
Bill Browder