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The fast rise and even faster fall of a trader who bet big with borrowed money.

edited April 2021 in Other Investing
https://www.bloomberg.com/news/features/2021-04-08/how-bill-hwang-of-archegos-capital-lost-20-billion-in-two-days

Before he lost it all—all $20 billion—Bill Hwang was the greatest trader you’d never heard of.

***Starting in 2013, he parlayed more than $200 million left over from his shuttered hedge fund into a mind-boggling fortune by betting on stocks. Had he folded his hand in early March and cashed in, Hwang, 57, would have stood out among the world’s billionaires. There are richer men and women, of course, but their money is mostly tied up in businesses, real estate, complex investments, sports teams, and artwork. Hwang’s $20 billion net worth was almost as liquid as a government stimulus check. And then, in two short days, it was gone.


The sudden implosion of Hwang’s Archegos Capital Management in late March is one of the most spectacular failures in modern financial history: No individual has lost so much money so quickly. At its peak, Hwang’s wealth briefly eclipsed $30 billion. It’s also a peculiar one. Unlike the Wall Street stars and Nobel laureates who ran Long-Term Capital Management, which famously blew up in 1998, Hwang was largely unknown outside a small circle: fellow churchgoers and former hedge fund colleagues, as well as a handful of bankers.***


Win big...loose big
Anyone came close w their portfolios?

Comments

  • I have to do the winning part first in order to do the losing big thing. Anyway my losses will be measured in the $100's and most certainly not in the billions. If I had a million I'd just quit the game.
  • edited April 2021
    Not much good to be said for gambling (sports and otherwise). However, in small amounts ($5-$25 a wager) it’s a useful way to understand your psychology and how overconfidence or greed can destroy an asset base. The psychology is quite similar. Run up a nice profit over weeks or months. Do everything “right”. Winnings pile up. Than become supremely over confident on one single wager. Bet the farm. Keep doubling-down until the bitter end. Difference is amount. Small time betting you might lose $50-$75 in a night. With investing, you might lose your life savings or destroy an empire.

    “Know when to hold up. Know when to fold up ...”
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