--- title: "Meaning & Key Takeaway of: The hedge fund known as \"Long Term…" description: "\"The hedge fund known as \"Long Term Capital Management\" collapsed last fall through overconfidence in its highly leveraged methods, despite I.Q.'s of it..." image: "https://sms4smile.com/quotes/i/2c0/charlie-munger-458_appraisal_the-hedge-fund-known-as-long-term-capita_2253577.jpg" --- # The hedge fund known as "Long Term Capital Management"… ![“The hedge fund known as "Long Term Capital Management" collapsed last fall through overconfidence in its highly leveraged methods, despite I.Q.'s of its principals that must have averaged 160. Smart people aren't exempt from professional disasters from overconfidence. Often, they just run aground…” quote by Charlie Munger](https://sms4smile.com/quotes/i/2c0/charlie-munger-458_appraisal_the-hedge-fund-known-as-long-term-capita_2253577.jpg) [Download](https://sms4smile.com/quotes/i/2c0/charlie-munger-458_appraisal_the-hedge-fund-known-as-long-term-capita_2253577.jpg) [Open image](https://sms4smile.com/quotes/i/2c0/charlie-munger-458_appraisal_the-hedge-fund-known-as-long-term-capita_2253577.jpg) > “The hedge fund known as "Long Term Capital Management" collapsed last fall through overconfidence in its highly leveraged methods, despite I.Q.'s of its principals that must have averaged 160. Smart people aren't exempt from professional disasters from overconfidence. Often, they just run aground in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods.” [Charlie Munger](https://sms4smile.com/quotes/author/charlie-munger/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Even highly intelligent, well‑educated people can fail when overconfidence drives them to take excessive risk. **In simple terms:** Overconfidence can cause smart people to fail. Key Takeaway Beware overconfidence and test assumptions. Themes finance psychology risk management leadership Mood cautious reflective Type advisory educational When to use this quote - investment strategy - risk assessment - team hiring - performance review - educational workshops Key Concepts overconfidence leverage decision bias Questions to Reflect On - What checks can curb overconfidence? - How can teams improve risk awareness? A Different Perspective Leverage can amplify losses as well as gains. ★ ★ ★ ★ ★ No ratings yet [Appraisal](https://sms4smile.com/quotes/about/appraisal/) [Customer](https://sms4smile.com/quotes/about/customer/) [Despite](https://sms4smile.com/quotes/about/despite/) [Difficult](https://sms4smile.com/quotes/about/difficult/) [Disaster](https://sms4smile.com/quotes/about/disaster/) [Disasters Overconfidence](https://sms4smile.com/quotes/about/disasters-overconfidence-5157606/) [Fall](https://sms4smile.com/quotes/about/fall/) [Fall Overconfidence](https://sms4smile.com/quotes/about/fall-overconfidence-5157605/) [Fund](https://sms4smile.com/quotes/about/fund/) [Hedge fund](https://sms4smile.com/quotes/about/hedge-fund/) [Known](https://sms4smile.com/quotes/about/known/) [Lasts](https://sms4smile.com/quotes/about/lasts/) [Long](https://sms4smile.com/quotes/about/long/) [Long term](https://sms4smile.com/quotes/about/long-term/) [Management](https://sms4smile.com/quotes/about/management/) [Method](https://sms4smile.com/quotes/about/method/) [Overconfidence](https://sms4smile.com/quotes/about/overconfidence/) [Overconfidence Highly](https://sms4smile.com/quotes/about/overconfidence-highly-5157604/) [People](https://sms4smile.com/quotes/about/people/) [Principal](https://sms4smile.com/quotes/about/principal/) [Running](https://sms4smile.com/quotes/about/running/) [Self](https://sms4smile.com/quotes/about/self/) [Smart](https://sms4smile.com/quotes/about/smart/) [Smart people](https://sms4smile.com/quotes/about/smart-people/) [Superiors](https://sms4smile.com/quotes/about/superiors/) [Talent](https://sms4smile.com/quotes/about/talent/) [Term](https://sms4smile.com/quotes/about/term/) [Voyages](https://sms4smile.com/quotes/about/voyages/) ## Related quotes > [I've heard that one-half of the students at elite schools want to go into private equity or hedge funds. 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