"When Genius Failed": A Tale of Hubris and High Leverage
The Collapse of Long-Term Capital Management (LTCM)
The collapse of Long-Term Capital Management (LTCM) in 1998 is one of the most infamous incidents in the history of finance.
LTCM’s implosion serves as a cautionary tale of financial conceit.
It is a story of a financially fatal cocktail of high leverage, the limitations of modern portfolio theory, and the impact of the ever-looming Black Swan.
LTCM’s Orig…
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