Followup to: Unteachable Excellence
As previously observed, extraordinary successes tend to be considered extraordinary precisely because it is hard to teach (relative to the then-current level of understanding and systematization). On the other hand, famous failures are much more likely to contain lessons on what to avoid next time.
Books about epic screwups have constituted some of my more enlightening reading. Do you have any such books to recommend?
Please break up multiple recommendations into multiple comments, one book per comment, so they can be voted on and discussed separately. And please say at least a little about the book's subject and what sort of lesson you learned from it.
Overconfidence leads one to seek leverage. Leverage in turn magnifies the consequences of errors. Leverage on LTCM's scale, which dwarfed that of its predecessors, turns errors into catastrophes.
Another, probably more important lesson concerns the degree to which one should rely on historical data. If something never has happened, or at least not recently, one cannot safely bet the house that it never will happen.
I probably shouldn't have speculated on what "popular belief" does or does not hold, but it has often been written, falsely, that LTCM was unhedged against Russia defaulting on its own bonds.