24 year old kid, all-in on trendy stocks, 4x leverage, making tons of “LinkedIn” type content blew up a hedge fund… I mean, this is a tale as old as time.
There are no young great traders and there never will be.
I am less interested in mocking the blowup than I am in understanding the timeless lesson of losing an account while young and trying to trade.
Great trading takes years. There is no other way to say it. No shortcuts, ever. It does not matter what essay this kid wrote about AI or what he learned at Anthropic.
Talk to anyone who has invested aggressively for a long time and you will hear some version of the same story. In their 20s, or early in their career, they pushed too hard. They got overconfident. They used too much margin. And eventually, they got hit.
Ray Dalio famously went broke in 1982 after becoming convinced that the U.S. economy was headed for a depression. He was so wrong, and had positioned himself so aggressively, that he had to borrow $4,000 from his father to pay his bills. Dalio has since called it one of the most important experiences of his life because it replaced certainty with humility.
Warren Buffett did not literally blow up Berkshire Hathaway, but even he spent decades discussing the enormous cost of his early mistakes. Berkshire was originally a failing textile company. Buffett took control in his 30s, thinking he was the next shoe genius.
He later described buying it as the dumbest thing he ever bought and estimated that using this dying textile business as his investment vehicle cost him an almost unimaginable amount of time, lost return, and headache.
You do not necessarily have to blow up an entire account to become a great investor. But if you’re going to try to be a trading legend, and take outside risk, it will most likely happen in some way.
And it may happen twice.
This is simply the nature of the game.
Even Citadel, the one’s who bought Leopolod’s share and is considered the greatest fund in existence at current… everyone has their bad day in markets or will.
Steve Cohen once gave one of the simplest warnings in investing: liquidity, leverage, and concentration are the three things that can kill you.
One may be manageable. Combine two and things get dangerous. Combine all three and, in Cohen’s words, you are “whistling past the graveyard.”
Charlie Munger made the same point even more memorably. He joked that smart people go broke in three ways: liquor, ladies, and leverage. Buffett later added that the first two were included only because they also began with the letter L. The real answer was leverage.
Leverage does not merely make you wrong faster. It can force you out of a fundamentally correct investment before you ever get the chance to be proven right.
Cash is what allows you to survive the moment when the market becomes completely irrational, your correlations all go to one, your lenders change the rules, and everyone suddenly wants out of the same door.
The investors with the best chance of escaping their risk of ruin are the ones who organize their portfolios around its existence. They keep some cash. They own liquid assets. They avoid betting the entire farm on one idea. They make sure no single event can permanently remove them from the game.
As a kid, this will never make sense.
As an old man who has seen some things, it’s all you can think about.
This is why there will never be amazing, young traders.
That is the deeper lesson here.
Anyone can get rich and then go broke taking a ton of risk. But only the old grizzled trader in their 60s is who people hear about in the history books.