When Genius Failed by Roger Lowenstein Summary
Overview of When Genius Failed
When Nobel laureates gambled Wall Street, Long-Term Capital Management collapsed spectacularly. "When Genius Failed" reveals how brilliance, arrogance, and $1.25 trillion in leveraged positions nearly broke the global financial system - a cautionary tale still haunting quantitative investors today.
Similar books to When Genius Failed
Feel the book through the author's voice
Turn knowledge into engaging, example-rich insights
Capture key ideas in a flash for fast learning
Enjoy the book in a fun and engaging way
Key takeaways
When Geniuses Gambled with the World
Four Nobel laureates, legendary Wall Street traders, and the most sophisticated mathematical models money could buy-what could possibly go wrong? In August 1998, a Connecticut hedge fund with positions worth over $1 trillion nearly brought the global financial system to its knees. This wasn't some reckless startup run by cowboys. Long-Term Capital Management was the most intellectually decorated investment firm ever assembled, a collection of financial geniuses who genuinely believed they had conquered risk itself. Their spectacular implosion became the defining cautionary tale of modern finance, yet its lessons remain hauntingly unlearned. John Meriwether built his reputation at Salomon Brothers on a deceptively simple philosophy: ride your losses until they turn into gains. The insight came from classic arbitrage-finding two nearly identical securities trading at different prices, buying the cheap one, shorting the expensive one, and waiting for the gap to close. It didn't matter whether markets rose or fell; all that mattered was convergence. In 1979, when securities dealer J.F. Eckstein faced bankruptcy from arbitrage trades gone wrong, Meriwether convinced Salomon to absorb his positions. Though initially hemorrhaging money, the prices eventually converged exactly as predicted, earning substantial profits and cementing Meriwether's mystique. This philosophy would eventually threaten the entire global economy.
Building the Cathedral of Leverage and Recruiting Genius
The Culture of Certainty and Early Triumphs
The Fatal Flaw in the Models
Chasing Returns into Dangerous Territory
The Perfect Storm and System-Wide Panic
The Lessons We Refuse to Learn
Quick Summary Mode - Read or listen to When Genius Failed Summary in 10 Minutes
Break down key ideas from When Genius Failed into bite-sized takeaways to understand how innovative teams create, collaborate, and grow.
Flash Card Mode - Top 10 Insights from When Genius Failed in a Nutshell
Distill When Genius Failed into rapid-fire memory cues that highlight Pixar’s principles of candor, teamwork, and creative resilience.
Fun Mode - When Genius Failed Lessons Told Through 19-Min Stories
Experience When Genius Failed through vivid storytelling that turns Pixar’s innovation lessons into moments you’ll remember and apply.
Personalize Mode - Read or listen to When Genius Failed Summary in 0 Minutes
Ask anything, pick the voice, and co-create insights that truly resonate with you.
From Columbia University alumni built in San Francisco
"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
From Columbia University alumni built in San Francisco
"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
Get the When Genius Failed summary as a free PDF or EPUB. Print it or read offline anytime.