(MONEY Magazine) – There's never been a more entertaining financial catastrophe than the implosion of Long-Term Capital Management. For a start, it was hard to beat for sheer drama: The infamous hedge fund lost more than $4 billion, surviving only after banks ponied up big money to bail it out. But the real delight of this debacle has been to watch some of the richest and supposedly savviest investors on earth get clobbered. Now that's entertainment.

Long-Term Capital sucked in Wall Street's heaviest hitters. The chairman of PaineWebber and the CEO of Bear Stearns stashed their own money in the fund. Banks jumped in too, with UBS losing nearly $700 million. The fund's managers were also mauled: One of them, famed bond trader Larry Hilibrand, borrowed $24 million so he could add to his stake.

Thanks to Long-Term Capital's virtual collapse, "hedge fund" has become an obscenity. But before this disaster, these were the sexiest investments imaginable. "The best hedge funds have become as exclusive as Augusta National, and hot managers are the rock stars of the investing world," Time magazine gushed last year, beneath the headline "Hedge Funds--or, How the Rich Get Richer." It was hard not to feel envious if all you owned were garden-variety mutual funds. I, for one, wanted a piece of the real action. Why should these exotic funds be reserved solely for, as Time put it, "superrich investors looking for hyperterrific returns"?

So 18 months ago, I found a gunslinging hedge fund in Chicago that let me invest far less than its usual minimum. I gambled $25,000 and waited to collect my hyperterrific returns.

By the end of 1997 I'd lost 15%, and by July 1998 my account had dwindled to $20,000. Needing the money to buy a house, I told the fund company that I'd be cashing out on Aug. 31. Then came the miracle. The fund shorted foreign stock indexes just before they got creamed. In the last eight days that I owned it, I made 31%. Still, my overall profit was a paltry 7%--much less than I'd have earned in a boring mutual fund that tracks the S&P 500. (The hedge fund, by the way, has continued to gyrate, losing 9% one day in October.)

Nonetheless, I miss my hedge fund. For a short while I belonged to an exclusive club of rich, high-rolling speculators. Of course, that's a silly reason to invest in something so risky. But, hey, at least I outperformed those clowns at Long-Term Capital Management.

--William Green