Let's face it: Dessauer's investment advice has been an unmitigated disaster. When I first signed on in the early 90s, Service Merchandise was in the teens and he was pushing it strongly. It fell steadily and all the way down, he kept pushing it. His last buy recommendation came at a price of $4 something at the end of the 1996 Christmas shopping season. Two days later, when dismal sales results were announced, it plummeted to $2, and that's when Dessauer said to sell all shares. C.P. Pokphand, our "chicken and chicken feed company" he first pushed at $11, urged more buying at $8, $5 and $3, and then reduced it to a hold when it fell to $1, and presently I believe it is small change- it practically worthless. Monaco Finance, our used-auto finance company, he recommended at $7, but advised selling at $1 plus change. Fletcher Forestry he recommended in the mid-teens, and presently it is below $2.50. When it fell to $8, he said that it was a good buy because it was selling for only book value. Then when it fell to $6, he said that it was deeply undervalued. "The trees are still there," he told us. And what about Comshare? This stock actually rode high for a brief while. I remember distinctly at $29 Dessauer said it was a still a good buy because it was selling "for only two and one half times annual sales." Today Comshare is selling in the $3 range. Do you remember his "million dollar portolio?" This was supposed to show us how easy it was to make a million dollars in the stock market. He doesn't mention it any more, but three of his picks were Comshare, PMRX, and Monaco. I forget the fourth one. But he conveniently doesn't mention it any more because it has lost so much value. And keep in mind that all of these disastrous losses have happened during a time of generally rising stock prices and prosperous times. It would not have taken a whole lot of insight a few years ago to buy WalMart (instead of Service Merchandise) or Intel (instead of LSI Logic) or Microsoft (instead of Comshare). Funny, how even following "the herd" into those stocks would have done us tons better than JD's picks. I curse the day I ever heard of John Dessauer. Why did we listen to him? I think it's because he has that glib, confident manner; he sounds intelligent; he articulates well and he speaks with authority; his voice is very reassuring, isn't it?; and don't forget he has a lot of experience. Now, whenever anyone suggests to me that experience is a measure of competence, I always think of John Dessauer. He is both incompetent and irresponsible, and here's the difference: incompetent refers to his lousy stock picks, but irresponsible refers to the way in which he manages risk, which is to say, he doesn't. A responsible investment advisor would realize that he could be wrong, that the market or a particular stock could move contrary to his expectations, even when he is strongly bullish. So how would he protect against huge losses? First, he would advise caution, advise holding a certain percentage in cash sometimes, especially when stock prices were historically high. Has John Dessauer ever advised anything less than a fully invested position? Not any time this decade that I know of. And the other thing he would do is not let little losses become big losses, and not let gains dissipate into losses, by having the discipline to SELL. But that is one four letter word that John Dessauer doesn't like. But, it goes even beyond incompetent and irresponsible, to the realm of what I call unethical. I think it's unethical to brag about your Wall Street Week Portfolio when it's doing good but make no mention of it when it's in the toilet. I think it's unethical to brag about having recommended Bally at 3 without admiting that you also recommended it at 16 before it fell to 3. In the July issue, he said "We have made money in the past with Fletcher Paper" and I wrote to him and pointed out that that was a lie. Fletcher Paper became a separate entity at a price of $23 a couple of years ago and it has gone nothing but down since then and presently is in the $4 range. Unless he sold it short without telling us, he never made any money with Fletcher Paper. Putting together his gross incompetence, his utter irresponsibility, and his alarming lack of ethics and truthfulness, and what seems to me to be a complete indifference to the suffering he brings to others (who knows how many college educations and retirement incomes are in ruin because of him?) I think he no longer deserves any respect or credibility or patronage,from us or anyone else. But it hardly seems fair for him to get off that easy, considering the wreckage he has caused. I would like to look into taking legal action against him.
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