Monday, January 19, 2009

Eight is Enough

(eight figure wealth that is).

After his hedge fund posted a return of 866% Andrew Lahde decided to stop.

He is an example to all suffering multimillionaires who are ruining their lives chasing after more millions while doing things that they don't enjoy or think are socially useful.

His farewell letter with my comments

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 love this passage, especially the part about "all levels of our government." However, after reading it (some time ago) I have been looking for confirmation and not finding it. I am very sorry to say that it doesn't seem to me that the top fools at Lehman and AIG are upper class twits. Surprisingly often, they have normal socioeconomic backgrounds (I mean normal not what you think is normal for CEOs).

AIG CEO Maurice (Hank) Greenberg is the son of a Taxi cab driver "When Greenberg took the reins in 1968, AIG was a privately held company. Greenberg, a compactly built son of a taxi cab driver,"

Lehman CEO Richard Fuld was in the ROTC (motto it doesn't matter if you get straight A's if you flunk tuition) at U Colorado Boulder.

hmm why is this link dead ? At Lehman when you're out, you're out.

(looking for Fuld's dad, I find that Lehman CFO Errin Callen is the daughter of a police officer).


Kenneth Lay waa poor as a child.


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. I conclude that Mr Lahde has an 8 figure net worth. 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. Ah a homonym. He means "reined in" (as in what you do with a horse) not "Reigned" as in what a monarch does. 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.

huh ? Adam Smith was never in that country.


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. If the best hope of defeating plutocracy in the USA was to have a rich person reshape the polity we would be in bad shape indeed. However, it sure looks like another approach is, well promising. Yes We Could. I hope that after a few months away from finance Mr Lahde is not so dispairingly convinced of the invincibility of concentrated wealth.

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. Oh my oh my, this passage isn't excerpted often. I agree with Mr Lahde and think it is especially wonderful that he expressed his opinion here 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. I assume that additive is a typo for "addictive" and I contest the claim. The defining characteristic of addictive drugs is that people feel strong cravings if they go without. So nicotine, heroin, crack, alcohol and marijuana are addictive (not equally addictive). Anti-depressants aren't. One thing I owe to Mr Lahde is the reminder (I had forgotten to take my daily 20 MG of prozac till I read that list). Also Marijuana was illegal long before pharmaceutical companies made significant profits from anti-depressants. Also they are getting basically squat for Prozac (not on the list and still legal) since it is off patent. The theory as to why Marijuana is illegal is clearly false. I don't think it was meant seriously. In any case, I agree with Lahde's policy recommendation 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


So, in comments, any suggestion for Mr Lahde's next line of work if he gets bored with retirement ? I'd say he has a lot to offer as an occasional columnist. The sad fact is that it is very very rare for people to make more money than they could ever spend, then retire. I think they need help. I think that Mr Lahde knows just the virtually harmless plant that can help them. I really hope that wall street dickheads would smoke the stuff if it were a condition for talking about what instruments he thinks are overpriced and oh I would love to be a fly on the wall.

6 comments:

Anonymous said...

http://delong.typepad.com/sdj/2009/01/the-bush-administration-an-oral-history-of-the-bush-white-house-the-threat-of-911-ignored-the-threat-of-iraq-hyped-and-ma.html

January 18, 2009

Cullen Murphy and Todd Purdum: this Sarah Palin–like president—because, let’s face it, that’s what he was. . . .

-- Brad DeLong

[Nutty sexist tripe.]

Anonymous said...

http://www.nytimes.com/2009/01/19/world/middleeast/19assess.html?ref=world

January 19, 2009

Parsing Gains of Gaza War
By ETHAN BRONNER

Have three weeks of overpowering war by Israel weakened Hamas as Israel had hoped, or simply caused acute human suffering?

Anonymous said...

http://www.nytimes.com/2009/01/19/world/middleeast/19gaza.html?ref=world

January 19, 2009

Shocked and Grieving Gazans Find Bodies Under the Rubble of Homes
By SABRINA TAVERNISE and TAGHREED EL-KHODARY

As the people of Gaza emerged from hiding on Sunday, they confronted the full, sometimes breathtaking extent of the destruction.

Anonymous said...

http://www.nytimes.com/2009/01/19/world/middleeast/19gaza.html?ref=world

January 19, 2009

Shocked and Grieving Gazans Find Bodies Under the Rubble of Homes
By SABRINA TAVERNISE and TAGHREED EL-KHODARY

As the people of Gaza emerged from hiding on Sunday, they confronted the full, sometimes breathtaking extent of the destruction.

Anonymous said...

http://angryarab.blogspot.com/2009/01/crocodile-tears.html

January 18, 2009

Crocodile Tears

Palestinian historian, Tarif Khalidi, sent me this (I cite with his permission): "The grief shown for the civilian deaths in Gaza by Shimon Peres and the Israeli UN representative, among others, adds a wholly new dimension of significance to the phrase "crocodile tears". It was Ben Gurion who first showed them how to do it in 1948 after the butchery at Dayr Yasin with his tearful telegram of regret to King Abdullah of Trans-Jordan. We must implore the Israelis not to shed any more tears for fear the river of tears might overflow and flood us all. They murder some 500 women and children and maim at least a 1000 more and the world is asked to applaud the delicacy of their grief. THESE are the real obscenities of the Gaza war, a war waged against a population that Israel itself had once turned into refugees and for whose indiscriminate slaughter it is now grieving."

-- As'ad AbuKhalil

Anonymous said...

http://angryarab.blogspot.com/2009/01/he-misses-objectivity-of-us-tv-news.html

January 18, 2009

He misses the objectivity of US TV news

OK, o brilliant Harvard PhD student. Let me tell you a few things: "During this shot, the correspondent inevitably 'catches' live footage of the Israelis continuing to bomb well into the cease-fire period, and inevitably expresses surprise and dismay at what he is seeing, even though he is essentially replaying a scene he framed the same way the day before, and the day before that." * First, it is not true that those correspondents express surprise. They don't even show emotions on TV, and in fact, I often wonder why they don't show emotions and why they don't even throw insults at Israeli terrorism, because unlike you, I harbor no admiration for US news media and I don't believe in Western media objectivity, that you so cherish. Secondly, they were covering the constant bombing because there was constant bombing in Gaza, even if you could not hear the bombings from where you were. I know that by watching Aljazeera, you must have missed the great professional (and let us not forget "fair and balanced") US TV news. And then you make the--how do I put it--unintelligent observation: "It is flagrantly political." Flagrantly political? Explain that one to me? You mean unlike the apolitical US media, which is unpolitical? And then you demand this: "but the integrity to do it in the service of peace, rather than the service of a side." Service of peace? Why not say service of the peace process, and throw in Martin Indyk as well. Spare me.

* http://www.boston.com/bostonglobe/ideas/articles/2009/01/18/the_violence_network/?page=full

-- As'ad AbuKhalil