Hehe. Yes, I appreciate your clarification. That is true - especially as LTCM was full with PhDs. Though it also extends to a multitude of "empty suits" positions. These bright minds needed to think in that structured fashion in order for them to have the world make sense to. It is an excellent point. Nevertheless, with experience and ambition judgement becomes better.

I would like to point out research in low-probability events, response to too-big-to-fail, fat tails and black swans in defense of emerging Financial Engineering and Risk Management. The best defense of it that I have ever seen was in the book "The Black Swan".