“Long-Term Capital Management was an American hedge fund that managed more than $100 billion in assets at its peak. It was run by literal geniuses; many former university professors, two of which were Nobel Prize-winning economists. For the five years from 1994 through 1998, LTCM produced an annual return of about 40% a year. Unfortunately, the hedge fund was enormously leveraged (borrowing and derivative wagers), and speculated in various forms of arbitrage. In short order, over $1 Trillion went bad, and in one month alone, LTCM lost close to $2 Billion. Genius failed.”