Subprime Hedge Fund Returns 1000%, Quits, Rips Industry A New One

Hedge Fund manager Andrew Lahde of Lahde Capital Management called it quits in a client letter today after returning 1000%+ on prescient bets against Subprime mortgage backed securities. But he didn’t just call it quits, he called out the financial sector, the hedge fund industry, and alluded to his plan to legalize marijuana. This is an instant classic today, the day it was written, and should resonate as a financial cult piece for years. Here’s the full memo, and below are some of our favorite excerpts:

Lahde on How He Made His Money

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.

Lahde’s Market Philosophy

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.

Lahde On Socioeconomic Flaws … And Innocuous Doses of Marijuana

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 addictive 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. Please people, let’s stop the rhetoric and start thinking about how we can truly become self-sufficient