A Burned Out Hedge Fund Manager's Final Rant
A friend of mind just sent me the link to the following CNBC article. It is a must read for an "I'm too burned out to do any more work this week, help me procrastinate" Friday afternoon.
Hedge Fund Manager: Goodbye ... And Think Pot
The article is basically just a re-print of hedge fund manager's Andrew Lahde farewell letter to clients. He pulled the plug on his fund last month after only one year...one stellar year in which it earned a whopping 866% by taking advantage of the stupidity and greed of many of the top CEOs in the country and betting against subprime, etc.
Below I have included a couple of outstanding quotes. Be warned though, while the letter starts out great, he lost me towards the end when he appears to completely lose his mind.
"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.
There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are."
"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. "
"On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government."
At this point the guy goes completely off of the deep end, heaping way too much praise on the obviously brilliant, yet arrogant and narcissistic George Soros who correctly predicted the current crisis in his recent book "The New Paradigm for Financial Markets", only to have his fund crushed while placing bets on the other side for Lehman, Petrobras, etc...
The book itself was a poorly-written bunch of self-indulging psychobabble on Soros' pet theory of "reflexivity." While I believe that Soros is right about reflexivity, what he took a million pages to say about it could have been summed up in a few sentences, like "fear causes markets to overreact in a way that no risk management model could ever predict" or "markets are often irrational and statistical modeling doesn't work well because investors' personal beliefs often distort the market causing them to overshoot on both the up and down side."
Soros' real-life, self-placed bets that go against everything that he said in his book really caused me to lose a ton of respect for him. I sincerely apoloize to Mr. Soros if his huge long Lehman and long oil bets were hedges for massive, undisclosed short positions. If not, he's a complete liar.
I digress...At the end of his rant, Lahde goes into how hemp and marijuana are the magical cure for all that ails our country, from being the key to energy independence to having the ability to cure us from our dependence upon evil pharmasutical companies and how the U.S. government intentionally witholds this miracle plant from is. Man, I think that this guy has toked one too many blunts. He really does need a vacation.
Anyhow, it's a pretty funny read. Enjoy and have a great weekend.