When Genius Failed

When Genius Failed is a book about the rise and fall of Long-Term Capital Management (LTCM), a hedge fund with over $120 billion in assets under management before collapsing in 1998, prompting a Federal Reserve bailout.

The book is divided into two parts: the ascension and the descent. The first section is represented by chapters 1-6, and the second by chapters 7-10. The first section examines the firm's business model, which was developed by two Nobel Laureates in economics as well as Harvard PhDs, and explains its early success in generating returns of more than 40% between 1994 and 1998. The second section, of course, chronicles its demise as the geniuses models fail to keep up with the ever-changing marketplace.

Former LTCM employees, the Federal Reserve, banks involved in the rescue, and one of the firm's founding partners were interviewed for the book. It was first published in 2000, and it served as a foreshadowing of the 2008 financial catastrophe, and it continues to act as a reminder of what may happen when a trader's thinking becomes complacent.

As of 2014, there were four English editions, five Japanese editions, one Russian edition, and one Chinese edition. The book earned various honors, including being named one of the best business books of 2000 by Business Week. With these archives, it deserves to be in the list of the best books on trading.

Author: Roger Lowenstein

Link to buy: https://www.amazon.com/When-Genius-Failed-Long-Term-Management/dp/0375758259