Letter from a Failing Hedge Fund Manager

Dear valued clients,

Sometimes I feel like explaining what I do with your money takes almost as much effort as making it grow. Still, it’s worth it. I’m confident that one day these quarterly letters will be published as a tome not just on successful investing but on how to succeed in life.

In the meantime, though, I would like to once again point to the confidentiality agreements you all signed and ask whoever has been leaking our communications to the press to cease and desist. The Wall Street Journal’s quip that investing with us was “like paying someone to light a fifth of your money on fire” wasn’t helpful.

Moving on to more pleasant matters, I am happy to report that we have once again taken advantage of the market’s shortsightedness to further lower the cost base in our largest position, Hemlock Pharmaceuticals. The SEC and FDA investigations did have a temporary effect on its share price, which you will have noticed once again in our quarterly performance, but I have great trust that Hemlock’s world-class management team has a firm grip on these issues. In financing growing companies, we always look for human value that doesn’t appear on the balance sheet.

Great line, right? I wish I had made it up, but it’s actually by Michael Milken. Here’s another one that I got from a fortune cookie at that new Sichuanese place on the Upper East Side: “The man who moves a mountain begins by carrying away small stones.” So true.

As I’ve said in past letters, patience is paramount and adversity builds character. It seems like only yesterday that Lehman Brothers went belly up. Junior high school is hard enough without losing all of your Bar Mitzvah money. While that stung, though, I sensed even then that I would make it back a thousand times over in performance and management fees.

And last year, when I left the trainee program at Morgan Stanley to hang out my own shingle, I was dismayed to find out that nearly all the good hedge fund names from Greek mythology had been taken. If only I’d been born 20 years earlier! Despite that, Oedipus Capital is off to a roaring start and, with your continued patience, I’m sure the best is yet to come.

And with that, it’s back to work making you all even richer. I know that the media image of a young master of the universe is glamorous, but it’s basically nose to the grindstone buried in financial models that would be too complicated for me to explain. Heck, I don’t even have a girlfriend. Like I read in another fortune cookie, women prefer men who have something tender about them – especially the legal kind. Get it?