Taking care of your health just got easier, thanks to my sponsor Zocdoc! Start here at: https://zocdoc.com/patrickboyle

Last week, 24-year-old Leopold Aschenbrenner — former FTX staffer, ex-OpenAI researcher, and author of the viral 165-page essay "Situational Awareness" — managed to lose roughly two-thirds of his $45 billion hedge fund in a matter of weeks. The margin calls arrived during his wedding weekend.

In this video I break down how a trader with no professional experience raised billions from Silicon Valley, why his AI "hedge" wasn't a hedge at all, and how leverage plus a concentrated bet on artificial intelligence stocks turned a great-looking expected return into a catastrophic outcome. Along the way we look at the cultural gap between Silicon Valley and Wall Street, why Ken Griffin's Citadel ended up buying the collapsing portfolio in an overnight fire sale, and the maths of volatility drag — the reason a high expected return can still drag an investor's typical outcome straight into the ground.

It's a story about leverage, risk management, expected versus median returns, and what happens when you go "full Kelly." Featuring reporting from the Wall Street Journal, The New York Times, Bloomberg, and the Financial Times, plus Victor Haghani's lessons from The Missing Billionaires.

Victor Haghani - The Missing Billionaires book: https://amzn.to/4fQUEEB

Elm Wealth Website: https://elmwealth.com/

Patrick's Books:

Statistics For The Trading Floor: https://amzn.to/3eerLA0

Derivatives For The Trading Floor: https://amzn.to/3cjsyPF

Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel

Patreon: https://www.patreon.com/PatrickBoyleOnFinance

Buy Me a Coffee: https://www.buymeacoffee.com/patrickboyle

Visit our website: https://www.onfinance.org

Follow Patrick on Twitter Here: https://bsky.app/profile/pboyle.bsky.social

Business Inquiries ➡️ sponsors@onfinance.org

Patrick Boyle On Finance Podcast:

Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b

Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313

Google Podcasts: https://tinyurl.com/62862nve

Join this channel to support making this content:

https://www.youtube.com/channel/UCASM0cgfkJxQ1ICmRilfHLw/join