"I did my due diligence but didn't anticipate these risks". Doesn't sound like due diligence to me. Not having a plan to unwind your position if SHTF doesn't sound like due diligence to me. You can argue it any way you like but it boils down to "The money was good and I didn't think the worst was gonna happen".
My comment was mostly against the idea that due diligence is a silver bullet, it isn’t. Of course that it can “catch” the most egregious cases, like outright fraud, but, again, no due diligence process can read the future.