Ladies. Liquor. Leopold.

So let's look at Leopold's situational awareness. And I've heard a lot of people say "He was right. It's leverage that got him." But leverage in the hedge fund business is not some freak accident. Many hedge funds borrow from their prime broker to multiply their capital. So leverage here isn't the villain. It is the fundamental job of a hedge fund manager to understand how much leverage the portfolio can survive when markets move. So here's a simple math example. If you've got 100 bucks, you borrow 300 bucks. Now you own 400 bucks of stock. And the market rips 10%. Congratulations, you got 40 bucks. And your equity goes from 100 bucks to 140. And that's a 40% return. Simple enough, right? But when the market falls 10%, that same 40 bucks comes out of your original 100. And now you are down 40%. And here's the part that amateurs like Leopold miss. Your debt is still $300, but your equity is only $60. So your leverage just jumped from four times to six times without you buying another share. So this is what happened to Leopold. His prime broker calls him up, they demand more collateral, or they say they're going to liquidate your position. And Leopold didn't have more collateral. And so this locks in his loss. And he forfeits his ability to wait and see if the thesis recovers. And let's remember, after you lose 40%, you need to make 67% just to get back to square. And this is why a hedge fund can't keep averaging down like a retirement account. Hedge funds have daily margin requirements, they've got investor redemptions, highly concentrated positions, just like Leopold's fund. Got hedges, they need to continually adjust, especially when they stop working. But there's really two takeaways here. Only professional risk managers earn the right to use leverage. And the second is, when all things go to s***, I can promise you that Ken Griffin will be waiting to greet you at the pearly gates with a smile.