The key points of this passage will provide you with an important reminder that no company or person should think they are better than everyone else because it’s impossible for them to beat the market on their own. Like Icarus, they were very successful but then went too far and crashed due to their own hubris. This fable can be used as a metaphor for Long-Term Capital Management (LTCM), which dominated financial markets in the 1990s. In this famous story, Icarus flies too close to the sun and his wings melt. Icarus fell into the sea below and drowned. He flew with those wings until he got too close to the sun and the wax holding them together melted. Icarus was given a pair of wings made by his father, Daedalus.
“Story-telling journalism at its best.1-Page Summary of When Genius Failed Overview and its ultimate destruction that much more fascinating.” - The Washington Post The fund was long cloaked in secrecy, making the story of its rise. “ Lowenstein has written a squalid and fascinating tale of world-class greed and, above all, hubris.” -BusinessWeek In his new Afterword, Lowenstein shows that LTCM’s implosion should be seen not as a one-off drama but as a template for market meltdowns in an age of instability-and as a wake-up call that Wall Street and government alike tragically ignored. The dramatic story of Long-Term’s fall is now a chilling harbinger of the crisis that would strike all of Wall Street, from Lehman Brothers to AIG, a decade later. 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. When it was founded in 1993, Long-Term was hailed as the most impressive hedge fund in history.
Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein explains not just how the fund made and lost its money but also how the personalities of Long-Term’s partners, the arrogance of their mathematical certainties, and the culture of Wall Street itself contributed to both their rise and their fall. 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. NAMED ONE OF THE BEST BOOKS OF THE YEAR BY BUSINESSWEEK
“A riveting account that reaches beyond the market landscape to say something universal about risk and triumph, about hubris and failure.”- The New York Times
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