Andrew Lahde: Goodbye!
Now, this is how you close a fund!
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% betting on the subprime collapse. Last month, he took his ball and went home. Tired of the stress, he closed the fund.
Today, Lahde passed along his "goodbye" letter (via FT Alphaville and Portfolio.com), a snarky "Up Yours" to those who do deserve it.
Enjoy:
Dear Investor:
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.
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.
So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don’t worry about my employees, they were always employed by Mr. Springer’s company and only one (who has been well-rewarded) will lose his job.
I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life — where I had to compete for spaces in universities and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.
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. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man’s interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft’s near monopoly. I believe there is an answer, but for now the system is clearly broken.
Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won’t see it included in BP’s, “Feel good. We are working on sustainable solutions,” television commercials, nor is it mentioned in ADM’s similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant — marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let’s stop the rhetoric and start thinking about how we can truly become self-sufficient.
With that I say good-bye and good luck.
All the best,
Andrew Lahde”
Friday, October 17, 2008 | 04:00 PM | Permalink
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Comments
Sounds like Lahde has it made in the shade.
He's right though - if we had more of those plants we'd all waste a lot less energy, mon.
Posted by: leftback | Oct 17, 2008 4:07:08 PM
BEST
RESIGNATION LETTER
EVER
Posted by: Steeliekid | Oct 17, 2008 4:11:23 PM
I bet you that Lahde spends his retirement growing the male cannabis plant and smoking the female one...
Damn, it's good the be a banksta!
HCF
Posted by: HCF | Oct 17, 2008 4:11:45 PM
As the Guinness guys would say, "Brilliant!"
Posted by: Mitchn | Oct 17, 2008 4:11:51 PM
Now that's what I call a good "Dear Investor" letter. No "100-year event we could not foresee" or "clearly, we wish we had been more conservatively invested". Great stuff. I resigned a few weeks ago from a soon-to-be partly nationalized Swiss bank and felt exactly the same way. I told as much to my boss, except the pot part.
Posted by: SwissBoy | Oct 17, 2008 4:14:01 PM
This guy is my hero.
Posted by: NY Stock Guy | Oct 17, 2008 4:14:17 PM
Why is this guy so bitter?
Posted by: lilypad | Oct 17, 2008 4:16:26 PM
What a great letter. What a nice position to be in: being able to tell losers what you really think of them after beating them at their own game.
Posted by: Mike in NOLa | Oct 17, 2008 4:17:52 PM
This guy reminds me a lot of Mark Cuban, who sold his company to Yahoo at the top of the bubble, and took his billion(s) to go do what he enjoyed doing. I really admire how each of them answered the question: how much is enough? Nowhere near enough of that around.
Posted by: P.K. | Oct 17, 2008 4:20:00 PM
Everything he said. Including "Nearly everyone will be forgotten." And hemp. And the female variety. Beautiful letter.
Posted by: rww | Oct 17, 2008 4:20:38 PM
Maybe this guy figured he wasn’t going to win the lottery a second time.
If Jesse Livermore had gotten out of the business after making his first $100M, his life would have turned out very differently.
Posted by: DL | Oct 17, 2008 4:23:27 PM
The guy has his head on straight.
For those seeking a bottom due to excessive bearishness, I offer two off-the-beaten-track indicators.
1) According to the CFTC Committment of Traders Report, small and large speculators are LONG the S&P futures as of Tuesday. They are virtually flat on Nasdaq.
2) Also as of Tuesday, the Birinyi Blogger Sentiment Poll has a mind-boggling ZERO PERCENT BEARS...75% Bullish, 25% neutral...I have never seen anything like that...I thought at first the chart printed wrong.
Posted by: Steve Barry | Oct 17, 2008 4:26:51 PM
In Russia there is a saying.
"Talent rests on the kids"
Sometimes I think something is really wrong with the system, especially education.
Don´t know how it is in USA, but in Sweden it seams to produce a small number of elite, while the rest stay dumb and drink beer.
I guess no government wants voters to "think".
Posted by: Dantemi | Oct 17, 2008 4:28:09 PM
The sports agency office is silent and stunned for a moment as Jerry Maguire makes a dramatic exit.
And then work resumes as normal.
Posted by: Transor Z | Oct 17, 2008 4:29:35 PM
Soros and weed?
The States just needs to turn into a gigantic version of Berkeley.
Ok.
Posted by: Bastiat | Oct 17, 2008 4:30:06 PM
lilypad...
"Why is this guy so bitter?"
He's probably a patriot.
Posted by: zicnarcsdad | Oct 17, 2008 4:31:45 PM
I asked, "Maria, did you have the big-O?" She said yes, but I knew different, I knew that she was trying to save face...trying circumvent the truth..."mommy, why is it no one tells the truth anymore?" said Maria's daughter, when she came into the rooom after the deed had been done. Why does it feel like the same thing listening to the people on CNBC pump-the-market?
Posted by: JustinTheSkeptic | Oct 17, 2008 4:35:50 PM
"Look upon my works ye mighty and despair......
Posted by: jlj | Oct 17, 2008 4:39:26 PM
for those interested in Industrial Hemp:
http://www.naihc.org/
He, the author, is truly spot-on re: our myopism re: Hemp.
You should wonder why the disconnect between 'mainstream' enviro- loobyists and Industrial Hemp exists.
If you're Intelligent the answer won't be hard to find..
http://www.industrialhemp.net/ is another, among many, legitimate sorce for more info..
The Author also points to the Il-legalization of Hemp's cousin, commonly known as Marijuana..see: Surely no member of the vegetable kingdom has ever been more misunderstood than hemp. For too many years, emotion-not reason-has guided our policy toward this crop. And nowhere have emotions run hotter than in the debate over the distinction between industrial hemp and marijuana. This paper is intended to inform that debate by offering scientific evidence, so that farmers, policymakers, manufacturers, and the general public can distinguish between myth and reality.
Botanically, the genus Cannabis is composed of several variants. Although there has been a long-standing debate among taxonomists about how to classify these variants into species, applied plant breeders generally embrace a biochemical method to classify variants along utilitarian lines. Cannabis is the only plant genus that contains the unique class of molecular compounds called cannabinoids. Many cannabinoids have been identified, but two preponderate: THC, which is the psychoactive ingredient of Cannabis, and CBD, which is an antipsychoactive ingredient. One type of Cannabis is high in the psychoactive cannabinoid, THC, and low in the antipsychoactive cannabinoid, CBD. This type is popularly known as marijuana. Another type is high in CBD and low in THC. Variants of this type are called industrial hemp.
In the United States, the debate about the relationship between hemp and marijuana has been diminished by the dissemination of many statements that have little scientific support. This report examines in detail ten of the most pervasive and pernicious of these myths.
Myth: United States law has always treated hemp and marijuana the same.
Reality: The history of federal drug laws clearly shows that at one time the U.S. government understood and accepted the distinction between hemp and marijuana.
http://www.naihc.org/hemp_information/content/hemp.mj.html
Simply, this Story, of Industrial Hemp, along with many others, predicate the conclusion: Our, current, Economy is predicated on Waste.
Also, he mentions an 'open-source' effort to reform our Gov't..
I'll submit that we already the the necessary Code, The Constitution. What is lacking is the understanding of it. That, growing understanding, would be a valuable endeavor, indeed.
Lastly, while ol' Homeslice is, certainly, Free to Choose, it doesn't seem that he's all to Interested in sticking around to help out..
That's the thing, to me, People shoud be paying attention to, it just may be the Best Call ever, from a Man who knows his Markets..
As I was saying before, I'm beginning to think John Galt was Right..
Posted by: Mark E Hoffer | Oct 17, 2008 4:40:29 PM
Like A Rolling Stone
Once upon a time you dressed so fine
You threw the bums a dime in your prime, didn't you?
People'd call, say, "Beware doll, you're bound to fall"
You thought they were all kiddin' you
You used to laugh about
Everybody that was hangin' out
Now you don't talk so loud
Now you don't seem so proud
About having to be scrounging for your next meal.
How does it feel
How does it feel
To be without a home
Like a complete unknown
Like a rolling stone?
You've gone to the finest school all right, Miss Lonely
But you know you only used to get juiced in it
And nobody has ever taught you how to live on the street
And now you find out you're gonna have to get used to it
You said you'd never compromise
With the mystery tramp, but now you realize
He's not selling any alibis
As you stare into the vacuum of his eyes
And ask him do you want to make a deal?
How does it feel
How does it feel
To be on your own
With no direction home
Like a complete unknown
Like a rolling stone?
You never turned around to see the frowns on the jugglers and the clowns
When they all come down and did tricks for you
You never understood that it ain't no good
You shouldn't let other people get your kicks for you
You used to ride on the chrome horse with your diplomat
Who carried on his shoulder a Siamese cat
Ain't it hard when you discover that
He really wasn't where it's at
After he took from you everything he could steal.
How does it feel
How does it feel
To be on your own
With no direction home
Like a complete unknown
Like a rolling stone?
Princess on the steeple and all the pretty people
They're drinkin', thinkin' that they got it made
Exchanging all kinds of precious gifts and things
But you'd better lift your diamond ring, you'd better pawn it babe
You used to be so amused
At Napoleon in rags and the language that he used
Go to him now, he calls you, you can't refuse
When you got nothing, you got nothing to lose
You're invisible now, you got no secrets to conceal.
How does it feel
How does it feel
To be on your own
With no direction home
Like a complete unknown
Like a rolling stone?
Posted by: The Mystery Tramp | Oct 17, 2008 4:43:16 PM
Legalize it! Yeah!'
I love Wall Street.
Posted by: Blueoysterjoe | Oct 17, 2008 4:47:01 PM
Love the low hanging fruit part. Fuck Yale & Harvard!!! The plant stuff. (bad idea) Throw the Blackberry away and God bless America.
Posted by: SLUGGO | Oct 17, 2008 4:49:24 PM
Totally agree with his letter; everything. Wish there were more like him in the U.S.
Posted by: Dan | Oct 17, 2008 4:53:11 PM
His most important point, tat most people seem to be missing, is that the house and senate have been bought and sold, and the people have been sold down the river. And no one seems to care.
Posted by: Max | Oct 17, 2008 4:54:55 PM
holy crap did he just say that!
Posted by: the0ther | Oct 17, 2008 4:55:19 PM
