Long-Term Capital Management (LTCM) was the hedge fund that imploded in 1998. It used massive amounts of leverage to generate high returns. As long as that leverage works in your favor, you can make a lot of money. When you bet wrong, that leverage can unwind and destroy you. This is that tale.
When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein is the detailed story of the rise and fall of Long Term Capital Management. This book is considered required reading for understanding the LTCM crisis.
History doesn’t repeat, but it rhymes. If you are interested in how the lessons from LTCM apply to the current market, read Genius Fails Again.