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Bob Wall
Senior Member
Username: Brewdudebob

Post Number: 1939
Registered: 11-2004
Posted on Tuesday, October 21, 2008 - 01:54 am:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

http://www.guardian.co.uk/business/2008/oct/18/banking-useconomy

So long, suckers. Millionaire hedge fund boss thanks 'idiot' traders and retires at 37

The boss of a successful US hedge fund has quit the industry with an extraordinary farewell letter dismissing his rivals as over-privileged "idiots" and thanking "stupid" traders for making him rich.

Andrew Lahde's $80m Los Angeles-based firm Lahde Capital Management in Los Angeles made a huge return last year by betting against subprime mortgages.

Yesterday the 37-year-old told his clients that he had hated the business and had only been in it for the money. And after declaring he would no longer manage money for other people, because he had enough of his own, Lahde said that instead he intended to repair his stress-damaged health; he made it clear he would not miss the financial world.

"The low-hanging fruit, ie idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking," he wrote. "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," he said.

"All of this behaviour 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."

Lahde became one of the biggest names in the investment industry when one of his funds produced a return of 866% last year, largely by forecasting the US home loans industry would collapse.

In his farewell letter, which concluded with an appeal for the legalisation of marijuana, Lahde said he was happy with his rewards and did not envy those who had made even more money.

"I will let others try to amass nine, 10 or 11 figure net worths. Meanwhile, their lives suck," he wrote, citing a life of back-to-back business appointments relieved only by a two-week annual holiday in which financiers are still "glued to their Blackberries".

Lahde's retirement came amid an implosion among the hedge fund industry - some 350 of the funds have liquidated this year, according to Hedge Fund Research.

His final words of advice? "Throw the Blackberry away and enjoy life."
 

Ron Siddall
Advanced Member
Username: El_cid

Post Number: 680
Registered: 12-2005
Posted on Tuesday, October 21, 2008 - 05:39 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

It truly does become a zero sum game at some point doesn't it?
 

Bill Pierce
Moderator
Username: Billpierce

Post Number: 9374
Registered: 01-2002
Posted on Tuesday, October 21, 2008 - 07:52 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Indeed trading (as opposed to investing) is a zero sum game. You're betting that you can predict market movements more accurately than others. You win because others lose--or more often for most people, the other way around.

(Message edited by BillPierce on October 21, 2008)
 

Keith M Williams
Member
Username: Grok

Post Number: 235
Registered: 03-2004
Posted on Tuesday, October 21, 2008 - 09:10 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

The only way to truly create wealth (make the pie bigger) is to produce something, anything from autos to zambones (sp?); intellectual property like books and software count. Everything else is just selling cotton.
 

Dan Listermann
Senior Member
Username: Listermann

Post Number: 6025
Registered: 03-2004
Posted on Tuesday, October 21, 2008 - 09:35 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Traders do produce liquidity of capital which is useful.
 

Bill Pierce
Moderator
Username: Billpierce

Post Number: 9375
Registered: 01-2002
Posted on Tuesday, October 21, 2008 - 10:04 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

To some extent you are correct, Dan, but yours is part of a similar argument used by Enron, for example, to justify their ventures into trading exotic derivatives such as weather events.
 

Dan Listermann
Senior Member
Username: Listermann

Post Number: 6033
Registered: 03-2004
Posted on Wednesday, October 22, 2008 - 05:36 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

There are extremes in anything. I would not want to live in an America that outlawed these traders. Better controlled, sure, but not outlawed.
 

Bill Pierce
Moderator
Username: Billpierce

Post Number: 9381
Registered: 01-2002
Posted on Wednesday, October 22, 2008 - 06:18 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Fair enough, Dan. I support a free market--provided that it's properly regulated. I will say that as far as I'm concerned traders are about as honest and ethical as used car salesmen.
 

Dan Listermann
Senior Member
Username: Listermann

Post Number: 6035
Registered: 03-2004
Posted on Wednesday, October 22, 2008 - 06:32 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

We need used car salesmen - really . . .
 

Brewtun
Junior Member
Username: Brewtun1

Post Number: 36
Registered: 10-2005
Posted on Friday, October 24, 2008 - 01:08 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

"I support a free market--provided that it's properly regulated."

That's pretty funny.
 

Bill Pierce
Moderator
Username: Billpierce

Post Number: 9396
Registered: 01-2002
Posted on Friday, October 24, 2008 - 05:50 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Well, the notion of the free market is sound, provided that the greediest aspects of human nature are not allowed to dominate. Capitalism remains the best of economic systems, but it is clearly imperfect and should not be allowed to operate unfettered. The result is what we have observed in the past year, and which continues today. I'm hopeful but hardly certain that we will survive the current crisis without a global depression. We need to very carefully examine what went wrong and institute checks and corrections.

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