Andrew Lahde of Lahde Capital has just closed his hedge fund and cashed in his chips, In a letter to Investors Mr Lahde explains his thoughts on the "idiots" running banks (or ex-banks) around the world. He doesn't pull his punches. "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."
Last year Andrew Lahde published another letter in which he said that he expected "the collapse in value of subprime mortgage-linked securities to be repeated for bonds backed by commercial property loans in a deep recession – which he also predicts."
“Our entire banking system is a complete disaster... In my opinion, nearly every major bank would be insolvent if they marked their assets to market.” He also explained that some of his own profits would be invested in gold and other precious metals. Although that was last year, so he may have got out of that by now too.
Mr Lahde also praised the values of hemp (not the type you smoke) as a highly ecological alternative food and energy source which can be used to make many energy-efficient products and save energy. This is very true - hemp is used to make highly energy-efficient hemp bricks, which are in turn used to build hemp houses (check out hempbricks .com and hemphouses .com)
Below is the full text of Andrew Lahde's remarkable letter, he doesn't name names unfortunately, but reading between the lines you can recognize some of the investment bankers that have led their banks (and the
stock markets and economy of the Western world) down the toilet, whilst at the same time pocketing huge bonuses. Perhaps they weren't so stupid after all?
"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 of 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”
I would guess that Mr Lahde has made himself quite a few friends but also a lot of enemies by publishing his letter. And despite his intentions I suspect we haven't heard the last of Andrew Lahde.
