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Saw the LTCM doco on SBS and I can't help but recall a comment Warren Buffett made about their demise.

Collectively every person working within LTCM had IQ's in excess of 160 and yet they still went bust which just goes to show it's not the smartest guys who make the most money - it's the most rational.

The reason they had Lowenstein on the show is that he has written a very good account of LTCM and their subsequent demise. Warren Buffet was asked to bail them out but he declined because of the risk factor.

Bernstein also dicusses their demise in "Against the Gods" which is also worth a read.

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