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Lessons from Leo: The Dark Side of Investment Conviction!

Aug 11, 2026

Aswath Damodaran discusses the rapid rise and fall of Leo Ashen Brener's hedge fund, Situational Awareness, as a case study on investment conviction. The fund, built on AI-related bets, achieved extraordinary returns before collapsing, leading to its liquidation. Damodaran uses this event to explore the concept of conviction in investing, questioning its potential downsides.

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KONeutralLow ConvictionResearch Only

Coca-Cola is used as an example of a mature company with lower pricing uncertainty compared to younger companies.

AINeutralLow ConvictionResearch Only

The creator uses AI as an example of a complex sector where deep business understanding, as potentially possessed by Leo Ashenbrenner, could lead to a superior assessment of fair price compared to the market.

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