How a Hedge Fund Pulverized 87% Of Investors’ Equity — An Alert For You

Obliterated lifetime savings: a tragic story that is becoming too common

Levi Borba
6 min readSep 9, 2022


Guy jumping from a cliff.
Non-related image. Or maybe not? It is someone taking a dive after all. Photo by Austin Neill on Unsplash

Have you ever heard the expression YOLO? If you are over 35 years old, there is a good chance that you have no idea what that means, but it is an acronym for You Only Live Once.

Even though I’m not 35, I didn’t know this either until I saw on some obscure Reddit forum that young investors (and I mean REALLY young, some of them still in their teens) were using that slang to talk about risky, stupid financial moves that could put their entire savings at risk in a single afternoon.

Why do they do that? Just for the thrill, I think. It is like buying a lottery ticket, but more expensive.

Also, FOMO (fear of missing out) plays a big role in all that, since a small share of those operations are successful and they generate more buzz than all the losing operations put together. Since nobody wants to miss the next stock or option that will go to the moon, they end up investing in whatever cr*p most of the group puts their money in.

But this article is not about some redditors. No, no, no.

It is about a hedge fund manager.

And not only that; it is about surnames.

So brace yourself, we are going to dive into a (very recent) story of insanity, despair, margin calls, and whatever else this guy was thinking when he did that.

The story of Arminio Fraga: one of the most brilliant hedge fund managers south of the Equator

There are not many economists that can also be called celebrities. But, at least in his home country, Arminio Fraga is one of them.

In 1985, immediately following his internship with the US Federal Reserve, Fraga received his PhD in economics from Princeton University. He later became a professor at Wharton School, one of the world’s most prestigious business schools.

At the age of 29, he was appointed chief economist of Banco de Investimentos Garantia, one of the major players in the Brazilian investment banking industry.