Hedge Fund Manager: Goodbye ... And Think Pot

[girl gone mad]

From the Scorched Earth Files:

Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse.

Last month, he did the unthinkable -- he shut things down, claiming dealing with his bank
counterparties had become too risky. Today, Lahde passed along his "goodbye" letter, a rollicking missive on everything from greed to economic philosophy. Enjoy:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.


http://www.cnbc.com/id/27239479

Much more at link. Worth it!! The part regarding our insane drug policy is towards the end.

[PetrusMonsFormicarum]

1. Bet you

the guy has a movie deal inside of a year.

[truedelphi]

2. It was satisfying to read this. His assessment of our newly found

And desperte state of affairs truly can be laid at the feet of those whose parents paid for their education at Yale, princeton, HArvard, etc.

If you ever read the Cosnstitution, you will note that its writers were hopeful that obstacles were a-plenty regarding the formation of a "nobility"

But once the Civil rights Act was passed, employers thought it wise to ask that everyone seeking work had at least a BA. (In the late sixties, when such thinking started, how better to keep the local black kid from getting ahead than to require that he or she have something in much shorter supply for kids from black families than from kids in white families.) And then a Master's was de rigeur.

Common sense was out the window. People turned to help from the experts and specialists for their monetary counsel - and almost all such counsel relied on some type of "bubble"

First the dot com bubble, then housing, and then the recent insanity of SIV's, and credit default swaps.

Common sense has been long lost. But hey, at least a whole bunch of America's middle class has a bunch of letters stringing along after their names.

[fascisthunter]

5. Our Forefathers were very much opposed to nobility

Washington himself didn't want people treating him as royalty, nor did he feel an elected official should ever look down upon his citizens out of gracious respect for those people giving him the responsibility as a President and not a king.

[truedelphi]

17. That entire era of people had a common sense understanding

Of what makes a nation work. They tried to use their Revolt Against England as a means to perpetuate such a fabulous system that never would the citizenry lose their inalienable rights to tyranny.

But with the coming of the age of the many degreed "experts," our citizens were educated that it was all about side supply economics. The cheaper the price of the goods, the better for the economy. You can read pages of this tripe (Er, excuse me, economic theory) and not once were the issues deemed to be the most important issues relating to Policies for a National Economy - issues admired and revered by the "founding generation" of 1750 to 1795 ever even mentioned. Why mention tariffs? Or imports? Or keeping jobs in abundant supply locally? said the great thinkers of the Friedman Revolt.

Whereas the colonists discussed endlessly the importance of limiting imports, having tariffs, and the need to create, keep and multiple a steady supply of local jobs - those matters somehow escaped the attention of those experts who toyed about with Milton Friedman's theories.

So we have had twenty five years of trickle down, lack of even the mention of jobs creation, and Gloablization. And with so many of our products imported from the unrestricted markets like China, we now watch our pets die from melamine-contaminated foods. (And later on, it will probably be even in our food - but hey - Milton Friedman's followers are all experts so what to do? Follow common sense? Or follow the experts who recommended the bastardization of our economy?)

Finally the Bank Reform Act of 1999 appeared and was signed into law by Clinton. This one piece of legislation allowed the banks to do anything they wanted to do - even to ignore those carefully crafted pieces of legislation that had been created in the aftermath of the Great Depression. Those laws from the thirties were created to ensure that never again would this nation go through the Great Depression.

As Vonnegut used to say, "So it goes."

[mike_c]

3. geat read-- recommended...!

Thanks!

[Swamp Rat]

4. k&r

[The Magistrate]

6. A Cold Man, Ma'am, And An Honest Rogue

"I prefer the wicked to the foolish. The wicked sometimes rest."

[lildreamer316]

7. Love it!

Thanks so much for posting!

[RadiationTherapy]

8. Boom. Legalize it.

Maybe we can come to grips with the fact that humans have urges to alter their consciousness(es) in less than another century.

[SammyWinstonJack]

12. Can't do that. The Prison Industrial Complex would collapse.

[RadiationTherapy]

13. I understand. It is refreshing though to hear this from a former corporate money grubber

The type of person I always considered an enemy of legalization.

[girl gone mad]

18. Kill two birds with one stone.

:)

[machI]

9. Kick

[Karenina]

10. . .

[KharmaTrain]

11. "The Casino Is Closed"

This was the comment I heard from a hedge fund manager lately. They're not the most popular people...and feel the heat as being the big movers and shakers in the market for more than a decade. This was a rigged game that amazed me how long it endured, but now that the bubble has burst and there's not another to replace it, the rats are jumping ship before things get too hot.

The financial world won't walk away from this mess without some heavy damage...investigations are under way and I expect a bunch of private lawsuits as well that will truly expose the scams that were played on investors and sitting right in the middle of it, were the hedge funders. The market tanked, they took their profits and left the others to pick up the pieces...as he says "the risks are too great".

I used to get newsletters from some of these financial "geniuses"...always pushing a new stock, a big trend or some other bullshit...and then said this was an offer only for those with a significant amount of money to play with (usually $100k)...I haven't seen one in several weeks. I guess they're on vacation.

At least this guy can walk away and "enjoy life"...millions of others...especially those who pensions were gambled away...aren't so fortunate.

[bemildred]

14. Burning bridges, and the sterling ring of truth. nt

[varelse]

15. Thank you for the link

:kick:

[crickets]

16. Wow, now that is some letter.

How typical of Matthew Malone from portfolio.com to skip the meat of his message about hemp and marijuana and boil it all down to a silly pot headline. Mr. Lahde made some excellent points about the state of the country and our government, including our energy and drug policies; Here's hoping the likes of George Soros are listening.