Video: The Trillion Dollar Bet

by: Jeffrey Moore

Here is the first of several Nova videos that are on the Longterm Capital Management debacle. I remember stumbling upon it on KET on a Sunday evening in when I was in middle school. Even then, I thought that the whole situation was one of the neatest things in the world. It may well have been one of the moments in my life that shaped me into being the contrarian value investor that I am today! :)

While I do think that some of the video is missing, the gist of it is there.

One thing that I didn't understand the first time that I watched it, and still don't get, is how much credence they still seemed to give the the Black-Scholes option pricing formula.