The Cyclicality of LTCM
Interesting to see that Long Term Capital Management is everywhere in the news this week.Nothing like having a few hedge fund problems to send everyone back to their favorite meltdown scare story.It is another example of over-fitting data. Not every large hedge fund that has troubles is an incipient LTCM, no more than every flakey company that gets funded implies we are in a new bubble. We humans are just way too fond of recreationally fitting data to non-existent patterns.
1
