Right About AI, Ruined by Leverage: Why a Good Thesis Couldn’t Save This Fund
A reader recently wrote to a finance columnist with a question many investors quietly ask themselves: what’s wrong with 5x margin if you can borrow cheaply, you’re young, and you believe you’re right about where the market is going? Days later, the answer arrived in the form of a real case study — a 25-year-old hedge fund manager whose AI infrastructure thesis was, by most measures, working. His fund still ended up selling its stock portfolio at a discount to one of the most powerful firms on Wall Street. The lesson is not that he was wrong about artificial intelligence. It’s that being right and staying solvent are two entirely different problems.