Forward Guidance LTCM Co-Founder on Risk, Leverage & Simplicity | Victor Haghani
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Nov 12, 2025 
Victor Haghani, co-founder of Long-Term Capital Management and founder of Elm Wealth, shares invaluable insights on risk and leverage in the investing world. He draws contrasts between LTCM's era and today's highly leveraged hedge-fund environment. Victor discusses the pitfalls of return chasing and the importance of fat tails in risk management. He emphasizes the effectiveness of his Dynamic Index Investing approach, advocating for simplicity and discipline over complexity in portfolio construction. Victor's lessons underscore the significance of long-term success and strategy commitment.
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LTCM Rise And The 1998 Collapse
- Victor recounts joining LTCM from Salomon Brothers and running the London office until the fund's collapse in 1998.
- He stayed to help liquidate the portfolio and return about $4 billion to the consortium of banks.
Size Decisions Should Maximize Utility
- Victor identifies 'skin in the game' and expected utility as the core lesson from LTCM.
- He says optimal sizing requires maximizing risk-adjusted wealth, not just choosing assets.
Return Chasing Drives Market Dysfunction
- Victor argues return-chasing harms investors more than underestimating fat tails.
- He believes extrapolative return estimates create market dysfunction and poor outcomes.