kaal:claim:3405660-008

The same leverage that produced LTCM's high returns magnified its losses, so leverage is a symmetric amplifier rather than a one directional source of performance.

Source quote, verbatim

In spite of the fact that leverage was key to LTCM ́s high returns, it also magnified LTCM ́s losses.

From

Kaal, Indirect Regulation of Hedge Funds (2019), II. The Need for Hedge Fund Regulation, p. 7
https://ssrn.com/abstract=3405660 · source PDF

Cite as

Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660

Classification

mechanismsupport: evidencedprivate-fundsrisk-and-incentives

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