When Genius Failed: The Rise and Fall of Long-Term Capital Management
With a new Afterword addressing today’s financial crisis
ABUSINESS WEEKBEST BOOK OF THE YEAR
In this business classic—now with a new Afterword in which the author draws parallels to the recent financial crisis—Roger Lowenstein captures the gripping roller-coaster ride of Long-Term Capital Management. Drawing on confidential internal memos and interviews with dozens of key pl
There are several lessons here, that apparently will not be learned.
Mathematical models are based on very good math with very many assumptions required to make the computations workable. T ...more
An interesting, well-told if brief account of the rise and fall of Long-Term Capital Management (you remember that one, don't you?). When things get heated it was along the lines of Sorkin's Too Big to Fail, but otherwise a decent treatment of the significant events in the life and death of LTCM.
Don't have too much more to share other than how prescient the following quotation (the book was written in 2000) was (or, perhaps how Wall S ...more
* Unregulated shadow banks
* Spiraling complexity of derivatives which few understood
* Over-reliance upon computer models which failed to account for the fa ...more
The fund boys: Meriwether, the leader, Victor Haghani & Larry Hilibrand, the overbearing maverick traders, Profs Merton and Scholes, the Nobel laureates and tutors to the rest of the street and many other ...more
В книге описывается история создания, анализ деятельности и громкое падение столь «звёздной» компании известной на Уолл-Стрит как LTCM (Long-Term Capital Management).
В книге переплетаются профессиональный и глубоко научный подход вместе с человеческими страстями к наживе к большим и сверхприбылям. Рекомендую прочитать и посмотр ...more
So the longer version is that star traders united with star economists unshaken in their belief in supremely rational and efficient markets to set up a fund. This fund made a lot of money investing in bets that any discrepancies in risk spreads would return to the norm. Over the course of 18 months they made their clients but above al ...more
LTCM earned great returns in the early ...more
Another piece of interest in this book is Lowenstein's meditation LT ...more
It's All About the Fund
As the title suggests, "When Genius Fails" is about the "Rise and Fall of Long-Term Capital Management." Don't expect to learn why the economy itself went to shit, causing LTCM to lose ungodly sums of money. The main character of this tale is the fund itself, and Lowenstein does a fine job of documenting its meteoric rise and catastrophic fall.
It's essentially an example story of what can happen when some very smart economists model what they expect to be a very lucrative business, but fail to take into account the human factor and how in times of crisis everyone he ...more
In a unique style, Lowenstein manifested the history of the rise and fall of LTCM, a Wall-Street Hedge Fund. Lead by a charism ...more
I'm quite surprised this story does not come up more frequently. Yet, another too big to fail story, but this time from a decade prior to our more recent economic crisis in 2008. The fact the company was founded by Nobel prize winners and actually named "Long Term Capital Management" compounds the unlikelihood of them going bust. However, they managed to lose $4.6 Billion dollars. Most of ...more
There were a lot of very fascinating takeaways about markets:
- "Markets conspire against the weak". Once the fund started to lose money, a number of fatal processes were kickstarted that accelerated the fall. First, LTCM was so massive in its positions that any move it made would move the ma ...more
One could say it was Goldman, and other traders sensing blood in the water, who took them down, and it was not merely their own egos. This blends into the chicken versus egg question. The writer offers some observation ...more