Saying you're sorry for losing a few bucks is one thing - saying you're sorry for losing $1.5 billion is another. That's what Sowood Capital founder Jeff Larson had to face in August of last year when he had to explain to investors how he lost half of the $3 billion that had been invested in the firm's hedge funds. What got Sowood in hot water was its bets on corporate debt, which was hedged by betting against stocks and more risky debt. But as the debt markets blew up, Sowood's use of leverage ended up being its death knell. But it appears that Mr. Larson is at it again as it's rumored that he has another fund in the works. He expects to launch with approximately $250 million to $500 million in capital. Fool me once shame on you. Fool me twice shame on me?
Saying you're sorry for losing a few bucks is one thing - saying you're sorry for losing $1.5 billion is another. That's what Sowood Capital founder Jeff Larson had to face in August of last year when he had to explain to investors how he lost half of the $3 billion that had been invested in the firm's hedge funds. What got Sowood in hot water was its bets on corporate debt, which was hedged by betting against stocks and more risky debt. But as the debt markets blew up, Sowood's use of leverage ended up being its death knell. But it appears that Mr. Larson is at it again as it's rumored that he has another fund in the works. He expects to launch with approximately $250 million to $500 million in capital. Fool me once shame on you. Fool me twice shame on me?