When Genius Failed (Roger Lowenstein)

Long-Term Capital Management (LTCM), a hedge fund founded by John Meriwether in 1994, made staggering profits of $2.1 billion in 1996, surpassing many heavyweight corporate giants. However, just two years later, in 1998, LTCM collapsed and nearly brought Wall Street and its investment banks down with it. LTCM’s fall was due to a deadly mix of leverage and illiquidity, a faulty assumption that investing is a precise science, and venturing too far outside their circle of competence. LTCM’s story serves as a cautionary tale about the dangers of hubris and overconfidence in the investment world.