Fair enough Dan, you can defend Dessauer if you want to, although I don't see why you would want to. I would like to comment on each of the points that you made.
1.As far as not buying too much of any one stock, I would point out that Dessauer encourages investors to buy more shares when they have gone down. For instance, in the December 97 issue when Pokphand was at $5, he said "If you already own Pokphand, my advice is to buy more shares!" (exclamation point his) Now think about it, what sense does it make to make a decision to buy a stock just because you already own it. That has absolutely no bearing on the wisdom of buying more. Either it is a good stock to buy or it isn't. But I think that he encourages that because it is like applying a poultice, it soothes the hurt of the paper loss you already have, almost makes you feel glad the price came down. What a dangerous way to invest. But please don't suggest that people should be "smart enough" to know when to heed Dessauer's advice (I refuse to call him JD, sounds too affectionate)and when to ignore it.
2. I'm glad you brought up BLY because he did not first recommend it at $8. By my recollection, it was much higher in price, well into the teens when he first recommended it. And it fell well below $8 before it turned around. But let's be clear about something. Just because he has a standing buy order on a stock and it falls to whatever price, doesn't mean that he deserves credit for making the call. For instance, he recommended CD at 24. It is now down about 10 I think, and I know it fell into the 7 range. That's about a 70% loss from his initial buy order. Someday, he may be able to claim credit for having recommended buying CD at 7, but, you won't see me cheering. His call was dead wrong about CD, and it really doesn't matter what happens in the long term. Just because the market almost always bails you out in the long run, is no reason to let Dessauer off the hook for being wrong.
3. You mentioned his winners, like STD and CCI, but considering that his "investment style" does not include protecting profits, look how much of the profit on those two stocks have been bled away. Do you really think they are examples of good portfolio management?
4. Let me give you an example about Asia. When LSI was in the 20s, he told us to buy it because it would not be affected by Asia, "there is no glut of LSI chips" etc. etc. Would you believe he had the audacity to say on the hotline while announcing the crash of LSI that it was all because of Asia? This is an example of him doing a convenient bait and switch. Never once did he suggest that he had made a bad call.
5. I don't see how you can say that his misjudgment of the Cendant fiasco was "debatable." What is to debate? The accounting/corruption problem was far more serious than he suggested, and he recommended buying it at way too high a price. Period. What else is there to say? There is just no defending him on that one Daniel, and like I said before, it really doesn't matter if over the very long term the market bails him out. That should not vindicate him.
By the way, I've been hearing from quite a few people on my e-mail. Many report the beating they took on Singer. Keep in mind, that was a round-tripper for Dessauer with over a 50% loss from his starting price. Do you know that he featured it prominently, extensively in one of his promotional mailers, and a lot of people acted from that alone. I guess you could say that it was a Dessauer loss that they got to have for free. I'm sorry, Dan. Although I am positive that you are a really nice guy and decent human being, I honestly feel that you are in denial about John Dessauer.
|
