In "When Genius Failed," Roger Lowenstein chronicles the rise and collapse of Long-Term Capital Management (LTCM), a hedge fund that promised extraordinary returns. Founded by Wall Street legends, LTCM initially demonstrated impressive performance through sophisticated financial strategies and extensive leverage, attracting significant investments. However, the firm's reliance on mathematical models and its inability to account for unforeseen market events led to catastrophic losses. The story serves as a cautionary tale about hubris in finance.

Oliver Wendell Holmes' quote, "Prophesy as much as you like, but always hedge," reflects the essence of LTCM's downfall, underscoring the importance of caution and risk management. Despite their confidence in their models, LTCM's failure illustrates the unpredictability of financial markets. The narrative emphasizes that even the most intelligent and experienced professionals must recognize the limitations of their forecasts and the need for protective strategies in investing.