James Cordier, in a dark suit, cuff links and expensive-looking watch, sits in a brown leather chair and stares into a camera, his hands folded in front of him.
Then he delivers the bad news.
His voice near-breaking at times, the hedge fund manager employs nautical terms to tell his clients in a roundabout way that he’s lost all of their money — in the neighbourhood of US$150 million, according to one estimate.
Oh, it gets worse:
[...] FCStone borrowed on margin against the accounts to cover money-losing positions. In the end, the clients didn’t just lose all their money, they also now owe FCStone for the loans [...]
Losing all the money in a speculative enterprise is bad enough, this genius borrowed money and lost even more! Why did he put himself in a position where the catastrophic loss would be over 100%? Apparently, he thought that he's an expert who could beat the cruelty of probability:
The collapse is a stunning turnabout for Cordier, who literally co-authored a book on the topic, “The Complete Guide to Option Selling.”
He should have read N. N. Taleb.