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Forgive me if I'm missing something here but isn't one traders loss
another's gain?
I seem to remember Warren Buffet putting money into zeros about a year ago.
At the time this looked like a higher risk strategy. If he is still holding
he must be well ahead..!!
If LTCM has indeed lost billions of $$ someone somewhere has won. Doesn't
this just confirm the advantages of the 'free market'??
It's always useful to see these lessons debated in public. It serves as a
warning to each and every trader the dangers of NOT using prudent money
management methods.
It seems to me that all Greenspan has done is to encourage those involved to
honour their commitments sooner rather than later. And the cost to the US
taxpayer......? Only the coffee served at the meeting. The benefit..? A
lesson in risk management?
The winning traders on the other end of the trades must be laughing all the
way to the bank. Doesn't it just give you a nice warm feeling thinking about
it.......!!!!!!!!!!!!
-----Original Message-----
From: ariel@xxxxxxxx <ariel@xxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: 02 October 1998 18:58
Subject: Long Term Capital Management
>Rt's
>There have been some excellent posts explaining just what LTCM did and
>did not do to get themselves in trouble. I hope some of you saw the PBS
>piece done on LTCM last night. What troubles me are the leverage
>numbers. They are absolutely staggering. I mean they had 3.5 billion
>dollars and had bets out worth approx. 1025 billion dollars. 300:1
>leverage??!! Greenspan said there is no way to regulate these off-shore
>funds. And I must believe, with LTCM being considered one of THE top
>hedge funds, that there were many other hedge funds following their
>lead!! I don't think this is over yet. Am I being paranoid here?
>
>Regards, Harry
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