Jack, I’m not going to leaf through the stack of wrinkled faxes of old PRST postings (I’m not on the internet, Jase faxes me the postings) to research the details of the discussion on the subject you raise in #650, but I recall the situation regarding the Lutts son’s Cabot Money Management selling of PRST shares being as follows, and being, therefore, entirely respectable, and unrelated in any way I can divine to the prospects for future earnings (Pete Previte: Tom and Neil have both emphasized your point (#649) to me – earnings are not now the point, revenues are the point; or, as Tom put it, Forget the bottom line here – what you care about is the top line!): If you are recommending good stocks, as Lutts-the-Elder is, stocks you give a Buy rating (while reminding people REPEATEDLY of the inevitability of sharp corrections, posting graphs showing Xerox, and other stocks’, ascensions and revealing how they, recurrently, sharply corrected (and yet, for those who rode out the periodic corrections, were brilliant stocks)) – well, if you’re Lutts-the-stock-picker, working for your actively-engaged subscribers, you have one function and responsibility. If, on the other hand, you’re Lutts-the-Younger, and the nature of your business and responsibility is managing people’s personal portfolios according to accepted asset-management practices, and you find that due to the rise in share price of one element in the diversified spectrum of investment choices you’ve made for your passively-involved clients, that one single element in the portfolio has become, by conventional, responsible, conservative money-management standards, weighted disproportionately heavily… well, what do you do? Let’s say you, like your Dad, love the stock, and believe that sticking with it for several years is a great bet. But still – you are aware that portfolio managers are supposed to maintain a portfolio’s balance. It’s rule one. And of course you know that not all your clients will be with you for five or six years. And you may be thinking as you fall asleep at night, "It’s one thing for individual investors who buy and sell shares on their own, knowing and accepting that a stock is very volatile, having been warned about corrections, to choose to be heavily weighted in one stock and to ride the corrections out.. But maybe it’s another thing entirely for me, professionally managing these people’s portfolios for them, to decide to weight them so heavily in this one very volatile stock… Hm-m-m. I’d better draw this situation to my clients’ attention in the morning and let them have input into this policy decision."
As I understand it, the Lutts son who manages these other peoples’ portfolios wrote letters to his clients explaining exactly what I described above re weighting of PRST, and said, essentially, "I’m planning to hold this stock for the long haul, but if you’re uncomfortable, you may choose to reduce the percentage of your portfolio invested in this one stock. Let me know."
As a very significant postscript to this situation, it is also the case, we’ve learned on this thread through Neil’s research, that while all the Luttses and all the employees of their enterprises hold Presstek in their personal accounts, and in their retirement accounts, not one of them has sold a single share of the stock.
Jack, I recall that you felt the Lutts son’s actions in this matter were somehow unscrupulous. But because he did what seems the moderate, responsible thing, given his particular professional role (even while holding on to his own personal shares of Presstek) I feel no disapproval at all. And I certainly can’t figure out how the prospective earnings, I mean revenues, of Presstek, are going to be affected by the Lutts son’s offer to lighten up on PRST for those of his clients who expressly requested him to.
I believe I recall from this thread that only a very few clients in fact did request that some of their Presstek be sold.
Anybody out there think I’ve misremembered any of this?
P.S. To Pierre: Listen, Pierre, if you are going to keep on insisting that the two misspellings in the 10K are so indicative of sloppy thinking, or whatever it was, at Presstek, please stop putting THREE s’s in a row in the damn word. There’s mis and there’s spellings. Hyphenated or not, there are only two s’s next to each other. I mean it’s a JOKE situation, the joke being on you, not on Presstek, and you aren’t getting it. Still!
P.P.S. To Tom: I’m sorry! I know how much you disapprove of impoliteness on this thread! |
