Jeff and All, Of all the percepted PRST negatives to be unleashed in this "stock bashing of the decade", my actual ONLY real concern was the possibility that Carleton Lutts had committed one or more SEC violations in his 2 years of promoting PRST
On Thursday, June 6, I had a long conversation with LUTTS. I received permission to post his answers on this site, as well as his study on the estimated and projected plate consumption profile being released to subscribers, which I have not yet received and will post when it arrives.
All of my concerns were put to rest by his up-front honest answers which he has seemed to reinforce by his actions over the last 7 or 8 days. (I will clarify this later in this post.)
The following were Lutt's claims...
1. That he has no deals with the Howards, Did not collaborate in anyway with them and has researched PRST through many sources.
2. That due to the strong rise by PRST, he does not feel the SEC questions to him and the request for Cabot documents he provided, are anything more than routine. He feels certian all is in order.
3. That all of his trading in PRST for Cabot News Letter, has been purchases. He nor Cabot Market Letter have NEVER sold a share.
4. All buys made for the Cabot Letter were only AFTER publishing of he recommendation to the subscribers.
5. There is no connection between Cabot and his son's money mannagement company. He and his son do not consult, nor is his son or any other person provided advance information of Cabot Market Letter picks. Lutt's Son's company subscribes to the Market Letter and does purchase some of the stocks that his Father's firm recommends. There HAS NEVER BEEN advanced information provided to anyone as insinuated.
6. Lutts firmly believes that the bares are responsible for initiating the SEC inquiry of himself and PRST. States it is due to desperation of the short position and a carefully calculated plan and all out attempt to discredit the continued growth of this stock that caused the expected correction to continue until Thursday.
7. Believes his Letter is to locate, recommend and promote the stocks of companies that have the potential and the ability to become future super stocks before the market recognizes these companies for their potential. He has never said these stocks were not volitable and subject to large swings in share price.
8. Lutts claims that the Forbes artical that accused the Cabot Market Letter of releasing information on the PRST purchase of Catalina Coating, prior to a PRST releasing the news is absolutely false.
9. Many other Investment Firms and Top Research Advisors have all called Cabot expressing their support and outrage on the personal attacks against his recommendations and research, including Dick Davis Digest.
10. Clearly feels that neither he, nor his firm has committed any wrongdoing and expects that this will become apparent soon.
Now, if I were Lutts and I wanted to retain my credibility, but knew I had drawn the SEC attention by doing some illegal manipulation.... (EXMP> profiting by selling PRST stock immediately after issuing a buy.) Would it not be a good time to SIT BACK and just watch the action....stay uninvolved, quit recommending the stock for a while? Maybe just back off from pushing PRST just a little???? NOT HARDLY!!!!
Long AFTER prst began it's correction, and certainly AFTER Lutts had informed his subscribers that he had responded to SEC questions and provided records to the SEC and AFTER the WSJ, BARRONS, and CNBC reported "POSSIBLE" alleged colaboration and "unwarrented Cabot hype on PRST", and AFTER Lutts had answered many questions to subscribers, and AFTER all the attempts made to try to tarnish his good name.......LET'S THINK ABOUT THIS.....Why Would Lutts Continue To Issue His DAILY Hot Line Messages With Stronger Buy Recommendations?
If so guilty, Why the special unscheduled letters. Not just letters recommending the stock, BUT URGING PURCHASE AT THESE PRICES...Why Would Lutts Continue to tout this stock as "clearly the stock of the decade?"
BUT WAIT....Tony T. might have the answer. In a prior post, Tony states.... "He is clearly being investigated for stock manipulation." Well is he? If he is, would you agree that Lutts is probally smarter than the average guy? With the Cabot Market Letter grossing approx. $6.5 million from subscription only, does the firm maintain a staff or access to attorneys that provide advise? Would they allow Lutts and his firm to continue to hype a company if there was not a true story here? In fact, breaking SEC rules is CRIMINAL...if Lutts WAS guilty of some type of fraud or manipulation for profit, would not his attorneys have stopped him from "manipulating" his subscribers?
If PRST is not a true story here, what other reason would Lutts have to proclaim PRST as the most undervalued stock in his portfoilio when it was a much higher priced stock!? Why does the Cabot Market Letter hold 40% of it's stock holding in PRST? - according to Cabot researcher, Cynthia Victory.
If Lutts is a manipulator, why wasn't half of PRST sold between 150 and 200? Could he have believed it has the potential to be a much higher priced stock? Why has Cabot still not sold even one share? Jack, Tony, John, any answers here?
If guilty, why, in the past few days has Lutts CONTINUED TO STATE: "You are being presented with an outstanding buying opportunity in PRST" "This is a great time to make an initial purchase or average up on PRST" "Hold on tightly to your PRST" "The highly fundamental story on PRST is still intact!" "This downward trend will soon pass"
Now, using common sense and reasoning, I, as well as you know this.....If Lutts were lying....If he is a crook....he is a rich crook, right? If PRST was such a hype... If Lutts has been coniving with the Howards and ripping off his subscribers, he would be guilty of what they accuse him of. Do you not thind the effect would be his having to turn over his complete Net Worth to his subscribers in the easiest won class action law suit that ever existed in the judicial system?
My opinion of Lutts, (which was so clearly stated in my proceeding post) has not changed. I believe him to be a honest man. I also believe his staff to be honest and above board. I believe PRST and their research team will CONTINUE to win the most coveted awards in their industry.
It was reported in an earlier post that 20th Century Ultra purchased 800,000 shares of PRST. Why didn't they sell at 200? I don't think any of us that post on this forum have the research ability to dispute their reasoning to buy this stock.
I spoke Friday to PRST regarding their patent. They replied they have no concern with the negative press regarding their position and feel the request "THEY MADE" (Not initially reported that way on CNBC) to strengthen their patent, is consistant with further protecting the future development of this and new technology.
They cannot believe the negative way this has been interperated by the press. The reason for PRST's request to the patent office was a result of information gathered during their recent SUCCESSFUL defense of their patent against another overseas company in court. Their move to keep their patents strong and beyond challange is COMENDABLE to their fine legal department and the PRST management. (I suppose PRST is the only company that has modified and amended their patents.)
My opinion of the Barron artical this weekend is as follows:
I believe Mr. Abelson is possibly the type of person that strives to always be right and never, never would allow himself to go off half cocked and take a vendetta against a company that did not perform at his expectation.
PRST it seems, could NEVER have become an overwhelming interest to Mr. Abelson (almost to the point of obsession.) How dare PRST rise to 200 after being reported to be a company without a future in Mr. Abelson's Barrons articals. How dare this Cabot guy, an author of a "sheet", disagree with WSJ and Barrons, both being great Dow Jones Companies.
God forbid any company dare to challange or dispute the facts as written and published by Mr. Abelson. Newspapers tell the truth....and nothing but the truth. They are never wrong....Isn't it obvious that PRST has no product or future???? Is it not true that over 2.8 million shares that shorted, have to be right? How dare the stock rise up to 95 Friday, after dropping so nicely. It must continue down.....It must, It must, Based on Mr. Ablelson's track record so many times in the past....I have no choice but to disagree with him.
After reading the Forbes artical, I wondered who they hired to write it? It was not to the caliber of reporting that Forbes has shown me in the past. Many discrepencies, many points deliberately left unanswered. Also allegedly clear untruthful statements. Others on this forum have pointed out information that was deliberatly left out regarding the reason the stock was recommended in the first place.
My opinion on PRST after all of this....Why has there been such a burning desire by a few to drive the price down. I don't have to use my imagination to figure this out. New orders are continuing to pour in. The Heidelburg factory is being expanded, production is being increased. Record earnings continue. For a company with no future, it sure seems to have left it's past behind!
Neil |
