Comments on: Book Review: When Genius Failed http://thefinancebuff.com/2008/03/book-review-when-genius-failed.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: Kristin http://thefinancebuff.com/2008/03/book-review-when-genius-failed.html/comment-page-1#comment-514 Kristin Tue, 18 Mar 2008 23:37:00 +0000 http://blog.thefinancebuff.com/?p=236#comment-514 A lot of us are counting on diversification to protect our portfolios. It can lead to a false sense of security. <br/><br/>Not enough investors are aware that correlations between asset classes can and do change over time.<br/><br/>This book sounds like a worth while read. A lot of us are counting on diversification to protect our portfolios. It can lead to a false sense of security.

Not enough investors are aware that correlations between asset classes can and do change over time.

This book sounds like a worth while read.

]]> By: TFB http://thefinancebuff.com/2008/03/book-review-when-genius-failed.html/comment-page-1#comment-512 TFB Tue, 18 Mar 2008 02:38:00 +0000 http://blog.thefinancebuff.com/?p=236#comment-512 David - I assume by "they" you meant LTCM. LTCM trusted their models. They also believed in diversification and non-correlation. They had hundreds of bets in different markets. They thought it was impossible for all of those bets to go bad at the same time. Then the unthinkable happened. The seemingly unrelated markets connected together and went against their bets at the same time. Being leveraged 30:1 killed them. David – I assume by "they" you meant LTCM. LTCM trusted their models. They also believed in diversification and non-correlation. They had hundreds of bets in different markets. They thought it was impossible for all of those bets to go bad at the same time. Then the unthinkable happened. The seemingly unrelated markets connected together and went against their bets at the same time. Being leveraged 30:1 killed them.

]]> By: Sperry http://thefinancebuff.com/2008/03/book-review-when-genius-failed.html/comment-page-1#comment-511 Sperry Mon, 17 Mar 2008 23:27:00 +0000 http://blog.thefinancebuff.com/?p=236#comment-511 Oddly enough, Bear Stearns famously refused to participate in the bail-out of LTCM. Oddly enough, Bear Stearns famously refused to participate in the bail-out of LTCM.

]]> By: david http://thefinancebuff.com/2008/03/book-review-when-genius-failed.html/comment-page-1#comment-510 david Mon, 17 Mar 2008 23:21:00 +0000 http://blog.thefinancebuff.com/?p=236#comment-510 TFB,<br/>I'm curious - did they necessarily do anything "underhanded" or was it that they just placed to much faith on their models? TFB,
I'm curious – did they necessarily do anything "underhanded" or was it that they just placed to much faith on their models?

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