I feel your pain, but you’re misinerpreting the quotes.
“He ‘found’ people, to take the other side of ‘his’ trades.
It does not say whether these people were his account holders, or his students, or his acquaintances, or dinner guests, etc.”
He is running a hedge fund, which means he can go long or short. He made millions for himself which means he made many many more millions for his investors.
When he is talking about “finding the other side of the trade”, he is just mocking people who were going long on financials that were heavily invested in subprime loans like BearStearns, fnma, aig etc.
Whenever you buy a stock, there is a seller, and vice versa...when you trade, trading lingo talks about the “sucker or bagholder” who was crazy enough to but a stock at a high level, while one shorts it...or vice versa”
I know all that. I know that hedge funds can go long or short. I run a hedge fund for my family trust. And my lock-up window is technically infinite so I do not have to register.
There have been many many many bets of all sorts in past years. Shorting the dollar for example was a good bet in past years.
But such bets are never without risk unless one has information that is not public, in which case it would be illegal to be involved.
So without 20-20 hindsight the subprime bet could have gone the other way, and people would be saying what an ‘idiot’ Lahde was, but instead he is a ‘genius’.
In the markets, today’s ‘genius’ is tomorrow’s ‘idiot’ and tomorrow’s ‘idiot’ is today’s ‘sucker’.
I know all the street lingoisms. They don’t impress me. What impresses me are causal relationships or budding associations that develop into causal relations. For example, a volume drop off in USD currency trades is associated with less USD supply caused by unwillingness of banks to release dollars. Dollar begins climbing against other currencies and oil futures slide. Get to the source data on dollar supply for currency trading and you can play futures with less risk.