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Shit happens and even the smartest people can get fucked, just look at the LTCM blow up. So of course it's possible. It's impossible to eliminate all risk, reg
by smabie 6y ago
Shit happens and even the smartest people can get fucked, just look at the LTCM blow up. So of course it's possible.
It's impossible to eliminate all risk, regardless of the leverage ratio. I'm just saying that leverage isn't a reasonable proxy for risk. You have to dig deeper.
- marvin 6y agoThat sounds reasonable at first glance, but it would be really interesting to see a proper study of leveraged investments throughout the modern era, and their tendency to blow up compared to the volatility of what would be the reasonable alternative.