# kaal:claim:3405660-008

**Claim.** 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.

**Type.** mechanism  **Support.** evidenced

**Source quote.**

> 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, page 7

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

**Verify.** sha256 of source PDF `cf507b1833071765bc13a5605f38c2591582eca85f40869e38b6ff075c04d29d` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202019%20-%20Indirect%20Regulation%20of%20Hedge%20Funds.pdf

**Topics.** private-funds, risk-and-incentives

**Keywords.** leverage, ltcm, hedge-fund-returns, risk-amplification

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.