Hedge funder Andrew Lahde’s parting shot

There's no doubt which was the most popular reading material in the blogosphere this weekend - the extraordinary 'farewell letter' from Andrew Lahde, one of the most successful hedge fund manager in the world, who has said goodbye - and good riddance - to his old life in spectacular fashion.

Lahde became famous a year ago when his Santa Monica-based fund, Lahde Capital, returned a staggering 1000 per cent plus during 2007. The fund made its profit by shorting US suprime mortgages, which Lahde correctly predicted were a ticking time-bomb.

He was doing well this year, too, claiming a return of 400 per cent plus until he suddenly announced last month that he was bowing out. Then, on Friday, he decided to write an open letter to his former investors.

"Today I write not to gloat," he began. "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."

He said he totally agreed with another hedge fund manager, also packing it in, who had written in the Wall Street Journal recently: "What I have learned about the hedge fund business is that I hate it".

"I could not agree more with that statement," wrote Lahde. "I was in this game for the money. The low hanging fruit - ie idiots whose parents paid for prep school, Yale, and then the Harvard MBA - was there for the taking."

Lahde went on: "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."

Lahde went on to urge George Soros to 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". Follow that!