When-Genius-Failed

When Genius Failed: The Rise and Fall of Long-Term Capital Management

“Story-telling journalism at its best.” ~The Economist

In this business classic Roger Lowenstein captures the gripping roller-coaster ride of Long-Term Capital Management. John Meriwether created fund after he departed from Salomon Brothers. It resulted in tremendous wealth for Meriwether, the partners, and other investors while it lasted. Unfortunately, when they fell, they fell hard and fast at the end.

Lowenstein explains not just how the fund made and lost its money but also how the personalities of Long-Term’s partners. Also the arrogance of their mathematical certainties, and the culture of Wall Street itself contributed to both their rise and their fall.

When it was founded in 1993, Long-Term was hailed as the most impressive hedge fund in history. But after four years in which the firm dazzled Wall Street as a $100 billion moneymaking juggernaut, it suddenly suffered catastrophic losses that jeopardized not only the biggest banks on Wall Street but the stability of the financial system itself.

The book does a lot of explaining about how bond and equity markets function. Lowenstein explains the technical jargon and how the fund accomplished positions like swaps. He also explains the reasoning—who wins, who could lose, and why. All of these explanations of the working of the international capital markets are done within the framework of the story of the Long-Term hedge fund.

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Francesco Pecoraro

Francesco has extensive experience as a project, program and portfolio manager, project management officer (PMO), digital transformation and strategic consultant. He is also considered a communication, public speaking and leadership expert.

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