The Dutch Investors #65 | Liquor, Ladies & Leverage | The three L’s that ruin great men
Nov 12, 2025
Explore the three tempting pitfalls that can derail even the brightest investors: liquor, ladies, and leverage. Discover how alcohol clouds judgment, leading to financial chaos. Unpack the distraction of lust and ego, finding cautionary tales in the downfall of Howard Hughes. Learn how excessive borrowing can shatter great financial trajectories with real-life stories. Finally, equip yourself with six valuable principles to navigate these challenges, ensuring a more disciplined investment approach.
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Simplicity Beats Clever Models
- Intelligence can mislead by making people favor complexity over simple, robust solutions.
- Simplicity often outperforms sophisticated models in investing and risk management.
Long-Term Capital Management Collapse
- Long-Term Capital Management used Nobel-winning models yet nearly collapsed the global system.
- Their failure shows brilliance doesn't guarantee immunity from catastrophic model risk.
Use Munger's Three L's As Guardrails
- Remember Charlie Munger's three L's: liquor, ladies, and leverage as key ruin factors.
- Use these categories as guardrails when assessing personal and financial risk.