Buffett on the risks LTCM's management took · Transcript · BuffettMungerGPT

WarrenIt's fascinating in that you had 16 extremely bright, I mean, extremely bright people at the top of that. The average IQ would probably be as higher, higher than any organization you could find among their top 16 people. They individually had decades of experience and collectively had centuries of experience in operating in these sort of securities in which the LTCM was invested, and they had a huge amount of money of their own up and probably a very high percentage of their net worth in almost every case up. So here you had super bright, extremely experienced people operating with their own money. And in effect on that day in September, they were broke. And to me that is absolutely fascinating. There was a book written, you only have to get rich. once. It's a great title. It's not a very good book. Walter Gutman wrote it, but it many years ago. But the title is right. You only have to get rich once. And why do people, very bright people, risk losing something that's very important to them to gain something that's totally unimportant? The added money has no utility whatsoever. And the money that was lost had enormous utility, and on top of that reputation is tarnished and all of that sort of things. So that the gain loss ratio in any real sense is just, you just, you know, you know, it's just you know, just incredible. I mean, it's like playing Russian roulette. I mean, if you hand me a revolver with six bullets or six chambers and one bullet, and you say, pull it once for a million dollars, and I say no, and then you say, what is your price? The answer is there is no price.