I'd skip the country and change my name if I were this trader. He lost $6 billion for a hedge fund by betting on natural gas futures going up, and in the past month they'd gone down.

http://www.tradermike.net/2006/09/amaranth_advisors_hedge_fund_ruined_by_ignoring_risk_of_ruin/

9/27/2006 6:04:31 PM

Diversify, diversify.

9/27/2006 6:05:59 PM

This belongs in the lounge at best.

9/27/2006 10:09:21 PM

Wrong section + give us percentages rather than actual numbers.


Plus, you don't diversify a hedge fund. That's why its a hedge fund.

[Edited on September 27, 2006 at 10:10 PM. Reason : .]

9/27/2006 10:10:06 PM

Long-Term Capital Management

It's like the bubble times all over again.

Long-Term Capital Management (LTCM) was a hedge fund founded in 1994 by John Meriwether (the former vice-chairman and head of bond trading at Salomon Brothers). On its board of directors were Myron Scholes and Robert C. Merton, who shared the 1997 Nobel Memorial Prize in Economics[1]. Initially amazingly successful, it folded in 1998, losing $4.6 billion in less than four months.

[Edited on September 28, 2006 at 2:21 AM. Reason : sds]

9/28/2006 2:20:57 AM

diversify yo bonds nigga

9/28/2006 2:32:46 AM

So apparently this guy thought this was okay for the Soap Box...let's talk about why he thought it was appropriate and other implications.

We can make this Soap Box material in no time! We do it with everything else!

9/28/2006 2:38:31 AM

Well, he also thought it was okay to tuck his t-shirt into his jeans. So, I think it's just a general lack of etiquitte that caused him to do so.

9/28/2006 7:41:14 AM

Quote :

"bgmims: Plus, you don't diversify a hedge fund. That's why its a hedge fund."

And that's not the only thing you can diversify.

9/28/2006 10:54:56 AM

'Tis true, but this is a story about the hedge fund, not the investors' personal portfolios.

9/28/2006 10:57:44 AM

Quote :

"So apparently this guy thought this was okay for the Soap Box...let's talk about why he thought it was appropriate and other implications. "

Well, Soap Box is for serious discussions, and the Lounge isn't IMO. Six billion is a good chunk of change and to think that much money got lost by one idiot ought to make you feel good about the people in charge of your investment, right? The Lounge is more "I ate a banana sandwich for lunch" for topics.

...and I never look at that board anyway. This and sports, that's it.

[Edited on September 28, 2006 at 11:29 AM. Reason : /]

9/28/2006 11:28:02 AM

that guy should try suicide.

9/28/2006 11:57:42 AM

Quote :

"Have you ever lost $6 billion in a week?"

all the time...no biggie...just make $7 billion the next week...no sweat

9/28/2006 12:01:05 PM

Well, it is a big deal since it is the largest recent reminder as to just how dangerous hedge funds can be. I doubt any sort of regulation or change will come out of it, but it should at least remind investors not to treat them lightly. Especially supposedly "conservative" investments in the energy sector.

9/28/2006 1:14:44 PM

$6 billion = 6 billion stick figures

That's for those keeping score at home.

gg Flyin Ryan

9/28/2006 1:36:21 PM

Quote :

"Six billion is a good chunk of change and to think that much money got lost by one idiot ought to make you feel good about the people in charge of your investment, right?"

So we're supposed to assume this is typical? Is it?

9/28/2006 9:13:19 PM

It's an incomplete picture we're working with here.

Somebody who loses $6 billion in a week probably isn't playing with just $6 billion.

9/28/2006 9:29:05 PM

^^no, it's a very extreme and atypical implosion.

9/28/2006 9:33:12 PM

^Once every 8 years or so.

9/29/2006 7:52:26 PM