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Technology Stocks : THREE FIVE SYSTEM (TFS) - up from here? -- Ignore unavailable to you. Want to Upgrade?

To: Maurice S. Green who wrote (1268)	4/6/1998 5:24:00 PM
From: Noblesse Oblige	Read Replies (1) \| Respond to of 3247

Hi Maurice... I respect your views, sir. The "personal" nature of my points is sometimes unfortunate, but I would remind you that it was Mr. Buchanan that first became "personal" by castigating me and my analysis (though not mentioning me by name) with his comments about the Philippine peso...and how that would have no impact on his business. Of course, since that time he has published his annual report...and voila'...right in the shareholder letter, he indicates that the peso devaluation will be a help to results. My point is not to rehash old wounds, Maurice, but unfortunately I believe that Mr. Buchanan is more concerned about proving himself right...than he is about being right. And, I think that is an unfortunate character trait. Parenthetically, this might have something to do with the "revolving door" at TFS's senior management levels. Your assessment that he has no admiration "for analysts in general or even for mutual fund managers" is probably true enough. On that end, I have heard a very interesting story...which I believe to be true because I have had it independently verified...that bears witness to your assessment. Apparently, some years ago when TFS was getting ready to do a significant public offering of common shares, the company's investment banker (First Chicago) set up a schedule of due diligence meetings so that senior management could meet with a variety of institutions and wealthy individuals. Such meetings are standard fare in the industry, and everyone...even the major companies...has to do them. Invariably, those meetings go from city to city, and though they are unquestionably tiring for the participants (and certainly for senior management) the necessity to "press the flesh" is obvious. Anyway, with Boston (and the Fidelity Funds group, among others) toward the end of the due diligence trip, a substantial snow storm hit the northeast. Traveling was difficult, but not impossible. So what happened? According to reports I have heard, Mr. Buchanan cancelled the meeting, saying that he was "tired," the deal had already been sold anyway, so what was the point of going into the Boston area? (I am glad that I am not in the underwriting business. Can you imagine what an investment banker would have to say to his boss...or even Fidelity...following a similar snub? <G>) If the report is true (and I believe it is), the largest mutual fund company was both pissed and dissed, though not necessarily in that order. <G> What this would mean to me, of course, is that you may be 100% right in your assessment of the view this company has taken toward the public and institutional investors. From where I sit...it is no wonder that there has been minimal institutional participation in this stock over the years. I don't believe it is a priority. And, I hasten to add (since this happened about 5 years ago), what probability is there that a man will develop new attitudes and priorities between the ages of 60 and 65? If I am right, it is sad indeed. The "market" has become largely institutional, and no matter how many Phoenix area "friends of the company" there are...that will never be enough, on its own, to give the stock its optimal value. It takes considerable effort and time to build the relationships that are necessary for stocks to trade at premium valuations. Of course, as a senior manager, most perceive that to come with the territory...and to be a very important part of the job function. You can judge for yourself whether that is so in Tempe. Anyway...that costs all of us money, as well as frustration, and in my own case, telephone-number-like blood pressure readings. <G> I hope this gives you some of the "flavor" of at least a portion of my perspective. Have a good evening. . PS: Although I don't have a Stetson, perhaps I will do well to purchase one prior to the annual meeting. So tell me, Maurice, should I buy it in white or black? <G>