The book "When Genius Failed" by Roger Lowenstein discusses the collapse of Long-Term Capital Management (LTCM), highlighting crucial lessons about risk management in finance. One key takeaway is that investors should be wary of overly sophisticated models that claim to predict future risks based on past data. The case of LTCM illustrates how reliance on such models can lead to significant failures, reminding investors to be cautious when faced with seemingly elegant solutions to complex financial problems.

Despite the lessons from LTCM's downfall, the author points out that Wall Street often fails to remember these warnings. The tendency is for investors to overlook past mistakes, particularly when presented with persuasive theories or technological advancements. This recurring behavior emphasizes the need for vigilance and skepticism toward models that promise certainty in an inherently uncertain market environment.