If you were building the perfect resume for the next great hedge fund manager, it would probably look something like Leopold Aschenbrenner's.

• Graduated from Columbia University as valedictorian at 19 years old.

• Joined OpenAI, where he worked on the company's Superalignment team alongside some of the brightest minds in artificial intelligence.

• Published a series of essays arguing that AI will require an unprecedented buildout of chips, memory, data centers, and electricity. These essays became must-reads in Silicon Valley and turned him into one of the most recognizable voices in AI investing.

• Left OpenAI after a very public firing.

• Launched his own hedge fund.

• Raised billions of dollars.

• Watched the fund swell to $45 billion all before his 25th birthday.

If you were writing the script...

The next chapter would probably involve a long and successful investing career.

He would grow old and wise like Warren Buffett and impart his wisdom on the next generation of great investors.

Instead...

It ended on Thursday with a margin call.

According to multiple reports, Aschenbrenner's fund was forced to unwind its public stock portfolio after the sharp pullback in AI stocks.

The irony?

I own many of the same companies he did. And you probably do too.

Micron, Nvidia, and several adjacent AI infrastructure stocks.

I didn't lose my portfolio. I assume you didn’t either.

Why?

Because Leopold's biggest mistake wasn't the stocks he bought.

It was the way he bought them.

“When you combine ignorance and leverage, you get some pretty interesting results.” – Warren Buffett

Here's where things went wrong.

Leopold wasn't simply buying AI stocks with his own money.

He was using 4-to-1 leverage to buy even more.

Think of it this way...

Say you have $1 million to invest.

Instead of buying $1 million worth of stocks, you borrow another $3 million.

Now you're controlling a $4 million portfolio.

If your stocks rise, your gains are amplified.

But losses are amplified too.

And when your lender believes their money is at risk, they can demand additional collateral.

If you can't provide it… your investments get sold to repay the loan.

According to regulatory filings, the fund was up 440% for the year through June as the AI trade ripped higher.

But then came July…

Its largest public holdings included Nebius, Sandisk, Micron, and CoreWeave.

All four of these stocks were down more than 35% this month.

As the losses mounted, so did the pressure from lenders.

When the fund couldn't meet those demands, they reportedly pulled the plug.

According to reports, much of the portfolio was sold directly to rival hedge fund manager Ken Griffin.

Just like that, one of Wall Street's hottest hedge funds was knocked out of the market.

But Here's the Real Gut Punch

One of Wall Street's cruelest ironies is that the market's biggest rallies often happen when fear is at its highest.

Just look at the chart below.

Largest Single Day Gains in S&P 500 History

All of the 10 biggest one-day gains in S&P 500 history occurred during the depths of financial crises, market crashes, and periods of extreme uncertainty.

Unfortunately for Leopold, this is exactly what happened to him.

His lenders forced him to liquidate his portfolio on Thursday morning.

That very same day the stock market exploded higher.

• Sandisk surged 26%.

• Micron rallied 18%.

• Bloom Energy jumped 26%.

What a brutal way to learn one of Wall Street's oldest lessons.

But the stock market doesn't care.

It doesn't care that you graduated first in your class.

It doesn't care that you worked at OpenAI.

It doesn't care that your AI thesis may ultimately be proven correct.

If you borrow so much money that a normal correction forces you to liquidate your fund...

You don't get to participate in the recovery.

It’s an important lesson that you need to remember when you’re investing your own portfolio.

And it’s a lesson that I constantly think about here at The Million Mission.

Unfortunately for Leopold, this is one lesson they must have not taught at Columbia.

So he had to learn the hard way.