Bill Hwang's tragic liquidation, the largest single-day loss in history

    In late March, the South Korean hedge fund Bill Hwang's Archegos Capital Management fund exploded, causing investment banks to liquidate its positions. This explosion triggered Goldman Sachs and Morgan Stanley to sell these stocks at significantly below market prices in the block trading market, making the investment bank liquidate its positions. A series of Chinese concept stocks and US media stocks plummeted. Tencent Music dropped 40.51%, Baidu dropped 24.73%, and GSX dropped 66.45% this week.

    In this incident, Bill Hwang threw $19 billion in a single day, setting the "largest one-day loss in human history". Not only that, but many well-known international banks have also been dragged into the water. The combined losses of Nomura Holdings and Credit Suisse are estimated to exceed US$10 billion, and many executives were forced to leave.

    Bill Hwang has always been a highly leveraged player. His Archegos fund has grown from $200 million in 2012 to $15 billion in assets through leveraged operations in just 8 years. Whether it's Bill Hwang, who recently exploded, or Long Term Capital, which collapsed in 1998, they cannot escape the fate of "infinity times zero is still zero" due to high leverage.

    Therefore, for ordinary investors, it is better to stay away from leverage, not to take chances, to learn from the advice of top investors and the lessons of others, rather than to reflect on it after such a tragic situation has happened to you.