I don't doubt LTCM was smarter at the start. But I don't think it takes hindsight to say that it's a stupid idea to put your entire net worth in one fund and th

I don't doubt LTCM was smarter at the start. But I don't think it takes hindsight to say that it's a stupid idea to put your entire net worth in one fund and then take out additional personal loans to put even more. One of the main dudes was like $30 million in debt after the whole fiasco! Also FWIW the next fund that the core group started didn't last much past 2008. I think it's fair to say they were wrong about the amount of risk they were taking. But yeah the initial bets were smart and not "gambling". The problem is the insanely big and leveraged positions they took and continued to build even while their core business was clearly shrinking. Especially the way they dove into markets they were less knowledgeable about, at least the way the book presents it they did not do their homework on e.g. merger arbitrage in the way they had with the bond market. IMO they totally got cocky too, even if they got cocky for a better reason.