--- title: "Meaning & Key Takeaway of: LTCM lost money when Russia defaulted on…" description: "\"LTCM lost money when Russia defaulted on a certain class of bonds, and then they had other investments like on the spread between two different kinds o..." image: "https://sms4smile.com/quotes/i/37f/richard-thaler-3060_certain_ltcm-lost-money-when-russia-defaulted-on_890616.jpg" --- # LTCM lost money when Russia defaulted on a certain class… ![“LTCM lost money when Russia defaulted on a certain class of bonds, and then they had other investments like on the spread between two different kinds of shares of Royal Dutch Shell Oil Company. Now that seems completely unrelated to Russian bonds. But they were related because other hedge funds…” quote by Richard Thaler](https://sms4smile.com/quotes/i/37f/richard-thaler-3060_certain_ltcm-lost-money-when-russia-defaulted-on_890616.jpg) [Download](https://sms4smile.com/quotes/i/37f/richard-thaler-3060_certain_ltcm-lost-money-when-russia-defaulted-on_890616.jpg) [Open image](https://sms4smile.com/quotes/i/37f/richard-thaler-3060_certain_ltcm-lost-money-when-russia-defaulted-on_890616.jpg) > “LTCM lost money when Russia defaulted on a certain class of bonds, and then they had other investments like on the spread between two different kinds of shares of Royal Dutch Shell Oil Company. Now that seems completely unrelated to Russian bonds. But they were related because other hedge funds saw similar discrepancies and they were all making similar bets.” [Richard Thaler](https://sms4smile.com/quotes/author/richard-thaler/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Hedge funds' similar bets link seemingly unrelated assets, showing market contagion. **In simple terms:** Similar bets create hidden links. Key Takeaway Watch for correlated risks. Themes finance contagion risk management Mood analytical cautious Type educational insightful When to use this quote - investment decisions - portfolio diversification - risk assessment Key Concepts hedge funds asset correlation Questions to Reflect On - What hidden connections exist in your portfolio? - How can diversification mitigate contagion? A Different Perspective Complex to predict all interdependencies. ★ ★ ★ ★ ★ No ratings yet [Class](https://sms4smile.com/quotes/about/class/) [Company](https://sms4smile.com/quotes/about/company/) [Dutch](https://sms4smile.com/quotes/about/dutch/) [Investment](https://sms4smile.com/quotes/about/investment/) [Lost money](https://sms4smile.com/quotes/about/lost-money/) [Money](https://sms4smile.com/quotes/about/money/) [Oil companies](https://sms4smile.com/quotes/about/oil-companies/) [Russia](https://sms4smile.com/quotes/about/russia/) ## Related quotes > [If you can't make 40% on your money in Russia, you're a fool.](https://sms4smile.com/quotes/simon-reuben/if-you-can-t-make-40-on-your-money-in-russia-you-re-a-fool/) Simon Reuben > [Money is important, but the most important thing for me is to play football, and then I'm happy. 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