Monday, December 20, 2010


Hardiest congratulations President Obama. You've put up with alot and have been facing alot. You've achieved changes in the tax code that no one else could accomplish. You have put best practices before politics and the results should work in your favor.

You took action in health care; whether its good, bad or indifferent, you did something. You took action in taxation policy; no matter whether its good, bad or indifferent, you did something. You took action in our wars; no matter whether its good, bad or indifferent, you did something.

Now I hope you will find the extra educational resources that the underprivileged need to bring their academic levels up to the levels of the most privileged students.


According to an editorial in the New York Times titled "It's time to Rethink The Charity Deduction" Professor Thaler states "If someone in the 36 percent tax bracket gives $1,000 to charity and deducts if from his income tax, the donation costs him only $640. The government picks up the rest." Professor claims that's a subsidy, but it's not.

The government is giving us an incentive, not a subsidy, in order to make a charitable donation. The person that makes no donation has more money after taxes than the person who makes a donation.

The 2011 tax bill is meant to be an incentive to help people buy, hire and expand. It's been government practice to achieve public policy goals through the use of tax changes. That's what I call incentive.

Friday, December 17, 2010


The New York Times is at it again. In an editorial written by Paul Krugman titled "Wall Street Whitewash" Mr. Krugman criticizes Spencer Bachus, the incoming G.O.P. chairman of the White House Financial Services Committee for saying that "Washington and the regulators are there to serve the banks."

I'm sure Mr. Bachus meant that there are millions of people employed at banks and in effect meant they are there to serve the working people of America, in this case the ones that work at banks.

His comments didn't suggest anything immoral, illegal, or nefarious. It certainly didn't mean there should be no regulation. It just plain old means the New York Times should stop letting it's editorial writers interpret things in such a way that they are trouble-making, out of context and not the underlying meaning of what the Chairman meant to say.

Senator Bachus should be applauded and hopefully he will respond and put these statements into meaningful context.


Yesterday, without naming the people, their political affiliations or their educational background, the government released a report concerning the electronic payment companies.

The immediate result was a $15 Billion dollar reduction in the value of the major companies in that business. Those major companies are a part of the critical infrastructure of the entire business payment system.

To top it all off, they are American companies, not Chinese or made somewhere else. $15 Billion dollars was taken out of the value of the institutional funds, pensions funds and other similar fund values.

Why are the people of the government not held accountable for, at the very least, their atrocious mishandling of the public relation aspects of their suggestions?

The whole idea that this is a release from the Federal Reserve is just plain wrong. This is a release written by some people who probably didn't think about the impact of their process on America's savings.

In theory, someone will be responsible to make up for the $15 Billion dollars, especially in the pension funds.

There's something wrong somewhere.

Wednesday, December 15, 2010


The New York Times is at it again. They published an editorial titled "Give Up On The Estate Tax" written by Ray Madoff. I thought it was worthy of funny commentary, critical review, etc. It starts off with the words congressional democrats but there are no names mentioned. Ms. Madoff then offers the brilliant insight to drop the estate tax and then just tax it as income to the recipient.

Ms. Madoff quotes Justice Brandeis as saying concentrated wealth and democracy can't go hand in hand. I believe there is no such thing as concentration of wealth. For the third time in my blogs I repeat that wealth is either spent or invested, it goes round and round in the system. The only problem with this country is that there isn't enough wealth. Think about that and analyze it.

She makes the statement that our greater dispersal of wealth was responsible for a strong middle class with absolutely no backup for that claim. It just doesn't matter how much wealth anyone owns, as long as they keep it flowing through the economy. Asking the question, what level of taxes is appropriate for heirs is like asking the question how much is a professor at Boston College Law School worth? (Ray D. Mafoff is a professor at Boston College Law School). There is a heck of alot of lawyers in this country. Maybe there are too many people being taught law and not enough people being taught how to make things. Why do people like Ms. Madoff talk about nothing but tax, tax, tax?

Here's a new idea. How about imposing an education tax. For example, someone like Ms. Madoff has all this education, that means she has an advantage over other people. Therefore, for every upgrade you get in education, your tax rate should go up, despite your income level. We can call it the "EDUCATION TAX" which can serve to even the playing field.

How about the person who spends all their money and has no estate and the other saves all their money and has an estate - get the point? The estate tax is no significant percentage of total government tax receipts. What motivates so many people to be so concerned about collecting that money? A lot of people write a lot of things about what should happen to other people's money. From my experience, most of these people aren't too charitable.

By the way, I decided to watch Michael Moore's film on Capitalism. It's just plain wrong throughout almost it's entire length and is out of context to what really has happened to this country.

Thursday, December 9, 2010


Monetary and fiscal policies have to result in a generalized return of confidence to considerably reduce unemployment. Presidents Bush and Obama have both pursued proper economic policies to stabilize the economy and help confidence return.

President Obama’s compromises with the Republican Party on tax policy would normally be the right steps towards increasing confidence amongst consumers and employers. Paradoxically, his political rhetoric continues to be left-winged and counterproductive towards his own economic goals.

You can’t measure the confidence reducing effect of President Obama’s political rhetoric verses the confidence building actions of his tax policy. President Obama still has an opportunity for greatness, but for some reason his priorities are not single focused on solving the unemployment problem, which would require him to stick to economics, not politics.

Tuesday, November 30, 2010


The European Commission has enough troubles keeping themselves solvent. Now they feel the needto launch a "formal" investigation into whether Google has abused its market position in online searches.

It seems the European Union may just be looking for some type of deep pocketed U.S. Firm they can trump up ridiculous charges against, order a "formal" investigation and hope to "extort" fines from in the form of a cash settlement.

No wonder there is such trouble everywhere over everything...


It's pretty rare that a CEO (let alone a co-founder) is escorted out of a building by the head of security. According to public documents that's how Lewis Sanders left his position at Alliance.

It doesn't seem logical that you escort a CEO out of the building with the head of security just because of client investment performance. It just makes no sense. What's the real story?

Alliance, you are a public company. Shareholders have a right to know why Lew Sanders, who has been lecturing students at Columbia University on investments, has been called a "legendary investor" in the press, and was CEO of your company would need the head of security to escort him out of the building.

I may misunderstand the figures but Alliance made a $600 million dollar settlement with the legal authorities for questionable activities in their funds. This seems like such a huge settlement and with company money, not management money. Why such a large punishment?

Was anyone being protected in the settlement negotiations?

Thursday, November 18, 2010


There is so much misleading information in all types of media that it’s absolutely a wonder that democracy can function at all. A few examples, the New York Times in a recent article titled Saving Momma From The Train Professor Richard T. Thaler states “The Congressional Joint Committee on Taxation estimates that eliminating the estate tax would cost over $500 billion over the next decade.” This piece of information is so out of context and leaves such a dishonest impression that it is “mind boggling”.

The Professor should know that to almost everyone $500 billion sounds like a heck of a lot of money. If you collected a billion grains of sand it would also sound like a heck of a lot of sand, but in reality, it’s next to zero percentage of the total sand in the world.

The government collects approximately $4 trillion of receipts from all kinds of taxes. Estate tax collections believe or not, are less than one percent of this figure annually. Over the next ten years the government’s receipts from taxes are estimated to be $45 trillion plus and the $500 billion in estimated estate tax receipts is not much over than one percent of the total. Obviously a very unimportant number.

The great attempt to mislead the public by claiming that the estate tax is important to the government balancing the budget is again misleading.

Furthermore, it is absurd to tax $7 million or $10 million estate the same amount as a person having a $1 billion estate. With a $1 billion taxable estate, even if it was taxed at 90%, there would be more than enough money left over to take care of all their children, charities and everything else. At the $10 million level the amount leftover after a 90% estate tax would hardly be described as leaving their biological heirs wealthy.

I said in an earlier blog that the political rhetoric, name calling and class warfare commentaries would inhibit the solving of the problems that exist in our society.

To make this discussion even clearer if someone makes a lot of money they either spend it or invest it. If they build a huge house, their money is transferred to the contractors, brokers, furniture manufacturers, plumbers and everyone else. If they buy stock the money is transferred to the seller, it’s not put under pillows. The same is true for money left to heirs, it circulates through the economic system. We will talk more about this at another time.

The New York Times often writes articles about the inequality of wealth. Without further comment, I looked at the total compensation of the top executive at the New York Times. This is a very poorly run company and in my opinion has done almost everything wrong. The total compensation of the top executive at the New York Times was approximately $6,000,000.00 in 2009. Enough said for now. Stay tuned...

Thursday, October 28, 2010


It is still important to preserve the truth about the early history of Sanford Bernstein and Company. In a recent interview with Roger Hertog, his version of the birth of Bernstein continues to be different than mine. What prompted him to comment on events that I have never seen mentioned before my website was launched? I don’t think he has ever stated in any interview that Bernstein lost his business partners (with the exception of his brother) within three months of the founding of the company.

The idea that Bernstein came to Roger and “a couple of others with an attractive offer” has no truth whatsoever as far as I’m concerned. While at Oppenheimer I went to Roger Hertog and proposed that we either start a firm or join one. We decided to discuss the possibilities with Bernstein after hearing he was practically out of business. A long protracted negotiation took place over seventy two hours; I was made the second largest shareholder. I brought along a hedge fund client Century Partners, which was the largest account of the firm for many years. At one point we made a clerical error of several hundred thousand dollars in our favor which Century didn’t know about. After long arguments with Bernstein, I persuaded him to return the money. Hertog seems to be in denial and can’t admit he was junior to me in the beginning. He babysat for me, worked as my assistant and then worked under me at Bernstein for over a decade.

It has come to my attention that people when questioned who Osherow was, were told that I left when the company was small. In the article Roger states that the firm had less than $100 million under management in 1980, as if to make the point indirectly again. The fact of the matter is that because of the difference in revenues per dollars of assets at that time, $100 million dollars under management in 1980 would be similar to $1 billion dollars today. Also, the reason we only had $100 million was because when Bernstein was in charge of money management we lost half of our client’s assets in addition to half the clients simply leaving the firm. Just to keep the record straight and to clarify the illusion trying to be created, when I left Bernstein, I immediately joined a well known firm as co-chief investment officer and helped to increase the firm's assets under management from $150 million to $6 billion in a few years.

Within a few years of joining Bernstein, I was appointed head of account management after Bernstein totally failed. I was left alone to produce investment ideas, recreate the entire money management department and keep the firm afloat. More shall come in the future to make this point absolutely clear. It is worth stating that from 1968 to 1980 Lewis Sanders had next to nothing to do with money management decisions, although Sanders has stated “I have a forty year record that is among the best in the industry”. That too will be debated and analyzed in the near future…

Roger finally sounds to me like he agrees with much of my assessment of Bernstein’s personality. Hertog refers to Bernstein hiring a clinical psychiatrist to study the company executives. Roger also refers to the Bernstein eulogy in the interview. I can find no such personality commentary in any interview Mr. Hertog has given prior to my website. Did the reporter find my website and ask for confirmation of these statements?

The reporter describes Roger as smoking a cigar in his Hamptons home. Hertog discusses attending Stuyvesant high school and refers to sex in his dialogue. None of this sounds like Roger to me, it sounds totally like Bernstein. Bernstein thought he was going to be president of the United States and besides his sexual analogies we know Bernstein “smoked a mean cigar”. I wonder what’s going on in Hertog’s mind.

As regards to Hertog and Sanders “anchoring Bernstein’s battleship of a personality” I was the one that lived in a home in Pound Ridge near Bernstein, saw him all the time, commuted to work with him and could relate stories much more malignant that I witnessed but choose not to reveal at this time.

The Hertog article states “Bernstein also took the step of giving all of its clients the same level of service, no matter whether they were $100,000 or $10,000,000 investors". This is in complete contrast to the Bernstein who was quoted in an interview in august 1970 in New York magazine in which Bernstein is quoted as saying “These Idiots! We’re managing their money. They want us to talk to them…”

Immediately after the “Idiots” interview I insisted that Bernstein write a letter to the editor to clarify that our clients were not idiots. The Hertog article states “besides treating clients ethically (and equitably) the company also went to enormous lengths to keep them engaged”. Does that sound like the Bernstein that called our clients idiots? As you can see from Bernstein’s idiots interview I attempted to protect the firm from his explosive and bizarre personality.

According to Hertog article “the firm’s success was more than simply a matter of adjusting to individual styles. It was mainly about the culture that the three men instituted, and the seamless way in which their moral and intellectual values meshed with corporate strategy”. There was no mention of the approximately $600 million dollar settlement paid by AllianceBernstein for illegal fund practices. A December 12, 2003 Washington post article titled “Alliance Struggles to Settle With Regulators; Size of Firm, Weight of Evidence May Make Deal a Model for Other Money Management Firms” was summarized on the Motley Fool’s website as follows:


Moral and ethical decisions? Personality distortions? Performance claims? Legal settlements costing AllianceBernstein public shareholders hundreds of million dollars to settle? Was that the beginning of the end for Alliance and Bernstein’s top managements which finally culminated in abysmal client performance and Sanders abrupt dismissal after Hertog had already left? Let the facts speak for themselves. So much for the beginning, so much for the end.

Saturday, October 23, 2010


Approximately August 1st Robert Greenberg, Chief Executive Officer of Skechers put out glowing statements about how the company was in a very strong position and things were going exceedingly well. Very seldom have I read anything more positive from a Chief Executive Officer.

Since that time the stock of Skechers has crashed from $37 to $22 even though the market has been rising. Robert Greenberg and his executive staff have said absolutely nothing of any significance and have allowed whatever forces at work in the market to cause a decline suggesting that Skechers business must be falling apart.

As an outraged shareholder I demand that this company come clean with the public and make an up to date statement about its business.

If you would like to see what Mr. Greenberg had to say you can refer to the company’s website and read July 28, 2010 press release regarding their earnings outlook. (

Thursday, October 7, 2010


Just read in Barron’s magazine “Vanguard Ousts AllianceBernstein Team”. According to the article Alliance Bernstein has been managing two thirds of the Vanguard U.S. Growth fund since 2001. The article quotes a Morningstar analyst, Katie Rushewicz describing the fund as “Persistently poor performance and management changes mar Vanguard US Growth; this fund has a dismal history”. According to the article the fund has underperformed both its large growth category and the S&P 5000 in the past 5 and 10 year periods.

Coincidentally, in January 2010, Vanguard hired Lew Sanders, who we have written about in prior blogs, and his new firm Sanders Capital, to co-manage the Vanguard Windsor Fund II. This fund also appears to be suffering from a lackluster performance record year to date.

Possibly Vanguard should try to evaluate the possible connection of Mr. Sanders to the lackluster years the Vanguard US Growth fund incurred under his firm’s guidance. Lew Sanders was Chief Investment Officer in charge of Alliance Bernstein investment decisions during what seems to be the majority of AB’s management of the fund. Stay tuned...

Wednesday, October 6, 2010


Now that Warren Buffett has taken it upon himself to become a propagandist for increased taxes for the only moderately wealthy, let’s ask Warren Buffett a couple of indirect questions. He seems to advocate approximately the same tax rate should be applied to people making incremental income above $250,000 per year as those making $10 million a year and above. It’s a bit ridiculous.

Mr. Buffett proudly boasts about his company’s outstanding growth via its book value. I took a real quick look at three insurance companies for the last ten to fifteen years in Value Line; Chubb, Allstate and Berkshire. A perusal seemed to show that those randomly chosen insurance companies had their book value grow in the same manner as Berkshires. No great genius on Mr. Buffett’s part, just an industry trend?

For the sake of discussion, let’s assume Mr. Buffett has a couple of hundred million of his multibillions of net worth invested in municipal bonds. If he gets a tax free return of 2% on his few hundred million in the muni market he would make approximately $4 million dollars on the two hundred million he invested.

Think about it, Buffett would get $4 million dollars of tax free income on such a small percentage of his fortune and he thinks that people who earn a few hundred thousand dollars a year should get an increased tax bill.

I think I read that one of Buffett’s children works at Berkshire Hathaway. I also believe I have read that he has either already given or plans to give each of his children approximately $50 million dollars. When you have the kind of wealth that Buffett has, you can afford to pay the taxes and still leave your children extremely wealthy. People at the lower level of wealth don’t have an equivalent option.

If he wants to opinionate on other people taxes why doesn’t he just give away all of his money instead of putting it into Foundations and taking the tax deduction for doing so. He actually has the gall to say he doesn’t even have a tax accountant.

By the way, from what I can tell, three companies; American Express, Coca Cola and Wells Fargo represent over half of Buffett’s equity investments. Looking at the financial performance of Mr. Buffett’s operating companies as reported in the most recent, confusing, almost 100 page annual report; it appears as if Mr. Buffett’s management skills, in the current economic climate, were not any better than those of his peers.

Since he seems to be a spokesman and model for so many, a public figure rather than a private one, why doesn’t he make a financial disclosure about all of his tax avoidance methods including his foundations, one of which I believe is being run by one of his family members. We would all be enlightened and learn something.

From what I can tell Mr. Buffett has created a public campaign of promoting the so called “working man” so no one really has the incentive to take a good close look at his true intentions and actions in his own life, which seem to me to be to protect himself from close public scrutiny. Increased taxes, to practically the wealthiest man in the world, mean almost nothing, to ordinarily wealthy people, they mean a heck of a lot. He’s just plain wrong. Stay tuned…

Monday, October 4, 2010


Recently President Obama talked about how he was not a “negative force for Wall Street”. I began to wonder what he really meant by “Wall Street”. Wall Street is just few blocks in New York City.

I thought maybe he was referring to the banks so I took a look at how many people are employed at Citibank, Bank of America and Wells Fargo. I asked five individuals how many people they thought worked at the three combined banks. No one even turned out to be close. The fact is almost one million people work at just these three banks.

Why is it that Wall Street is so often maligned, especially by the political left and especially when it has no meaning? There is an incessant attack on our corporate structure. Corporations are nothing more than a piece of paper. Each politically inspired attack is an arrow aimed directly at the work force.

Until intellectual honesty is brought into political discourse and cliché words are not used to stir up emotions, little progress will be made on the fundamental issues. One of the major problems with the political speeches is the lack of straight forward explanation that fixing the education system, the healthcare system and pretty much everything else requires lots of money. It’s easy enough to make money evil or greedy but those are just cliché words.

We need a system that is legal and moral and praises the people that work within it to create the growth necessary to create a growing standard of living, not a declining one. There is no such thing as bad corporations, there's just bad people. Stay tuned…

Tuesday, September 21, 2010


A competitive environment in which we all use our best abilities to perform our jobs usually produces the most effective results.

Investors must understand that “Wall Street” is selling a product. That product is defined as research. The research reports are often prepared by young people recently out of school and generally with no industrial background. Over my years on “Wall Street”, I have always found that analysts are constantly changing.

In a recent research report a brokerage firm referred to sales information they had obtained from a service called SportScan. We checked and were told the service costs a minimum of $30,000 per year. This information was in no way available to the general public.

The SEC, over and over again, speaks of a “level playing field”. Clearly, those individuals/firms that possess this type of information have information not available to the public and are able to make investment decisions based upon this expensive subscription service.

I happen to not believe in the concept of level playing field – there’s no such thing. It’s about time investors knew that decisions are made in a competitive environment and that some people will always have more information than others.


The Obama administration has been using the political technique of blaming everything negative on President Bush.

FACT: President Roosevelt called for everyone having a house. That’s where it started.

FACT: After our country was attacked on September 11, 2001 the stock market pretty much rose until its peak in about April/May 2007.

FACT: Obama announced his presidential candidacy in February 2007.

FACT: From that point onward the market declined to a low.

FACT: As President Obama’s popularity began to fall, the market has risen.

Let the facts speak for themselves.

Monday, September 20, 2010


I remember the day when the standard of living would rise modestly every year. That was also the time when no one would mess with an American tourist just because they may or may not have gone 10 foot this way or that way.

There was a news item recently that Lockheed Martin might be selling 60 billion dollars worth of planes to Saudi Arabia. We have very few major defense companies. It is only a matter of time when free shareholder owned companies decide to go elsewhere because it is obvious the markets from the rest of the world are so much bigger than America’s and probably more profitable. We will then lose control of our premier defense companies.

I remember meeting the Chief Financial Officer of US Steel many years ago. He boldly stated “We are US Steel – nothing can touch us.” Stay tuned…

Thursday, September 9, 2010


In the last few months the stock Skechers has been under tremendous pressure. The stock price has dropped in half despite the fact the company reported strong earnings and sales in the most recent quarter. This afternoon a report was issued by Susquehanna Financial Group and the stock was put under even more pressure based on a very serious reduction in next year’s earnings estimates.

Understanding the concern for legal liability we particularly noted the choice of words in the report. It was almost as if they were writing a legal document and absconding any responsibility for their choice of words and opinions. Here are some of the vague comments we noted:
  • “Based on conversations with retailers and SportScan POS data, we have concerns over sluggish volume trends” (We would like to know the name of the retailers they spoke to and which people at these retailers they spoke to. We would like to know what they mean about “we have concerns” as everyone has concerns; and what they mean by sluggish volume trends when almost all retail sales are sluggish these days).
  • “That event may not have been as strong” (In any forecast there is always the chance something “may not have been”. Where is the concrete numbers to make this assumption?)
  • We suspect there is some risk to 4Q and FY11 sales and earnings” (What in the world do they mean by “we suspect and some risk” – there is always some risk and we can always suspect something).
  • “Valuations may assume the worst” (Where is the data for this assumption?)
  • Leading us to believe that sales during the event may have come in below original expectations” (Did the management of the company indicate that sales have come in below expectations, if so, where? Why then was their third quarter revenue and earnings estimate maintained?)
  • “Given increasing promotions we believe early fall sell-through was not meeting original expectations” (Is there any concrete proof to this assumption?)
  • “We expect margin pressure” (Looking at their own calculations they really have no decline in the gross margin – they seem to be approximately the same. The entire earnings estimate decline is based upon increased SGA – where did that assumption come from?)
  • “We would expect cancellations to affect SKX in 4Q.” (What factual data are you basing your conclusion upon – actual cancellations that have occurred?)
  • We believe it will be very difficult to anniversary this growth spike and expect both divisions to see declines at least through 2Q.”(We notice in their report there is no quarterly breakdown for 2011 and obviously after such rapid growth last year despite a recession it is obvious the rate of growth would slow down.)
  • “The toning trend still has life. While we expect growth to slow, we believe the toning category remains very viable moving forward. “(Oxymoron…this statement has no depth to it and allows the analysts to protect themselves from any upside…Obviously if they mean by viable that it will continue to grow are they forecasting that Skechers share of market will be declining?)

At the conclusion of the report the analyst cites the risks to the upside as “1) a significant rebound in the toning category in fall and holiday leading to less promotions and cancellations; 2) better than expected 1H11 toning sales, particularly internationally where growth is expected to continue; 3) a swift pullback in marketing and other SG&A expenses; and 4) an unexpected share repurchase authorization or special dividend. Downside risks to our thesis include: 1)a worse than expected fall off in the toning category; 2)increased competition leading to market share losses; 3)a greater than expected increase in marketing expenditures; and 4)worse than expected international growth.”

We could go on about this report but we are very suspicious about the overall intention of these analysts in announcing this downgrade, late in the trading day, and certainly and most importantly considering the price of the stock and its recent volatility and downward trend. We have to wonder what the analyst’s true motives were with a stock selling at 8 times earnings on their lowered estimate, a company with literally no debt, and a company that seems to have created a brand name.

For the benefit of public shareholders who may not be privy to as much information as is supplied to, for example, hedge funds, we think it would appropriate, under the circumstances for this research firm to answer the following questions about their Skechers report.

  • Have any of the clients of the firm been either shorting this stock or buying puts on this stock?
  • Have the analysts had any contact with clients that are shorting this stock?
  • Does the parent company or these analysts, through its subsidiaries, have any relationship with Skecher’s competitors?
  • Has there been any financial dealing by the parent firm and/or its subsidiaries with a competitive firm to Skechers?
  • Does the firm expect to do business with any competitor to Skechers?
  • What is the record of the analysts who have written this report and gone to such extremes to write with such legalese and have come out with this report after the stock price has already gone in half?

We also noticed the appendix to this “timely” report which stated in part at the top of what if refers to as “IMPORTANT DISCLOSURES”:

“SFG and/or its affiliates beneficially own 1% or more of the securities of the subject company.
SIG, its affiliates and/or its principals may have been long or short positions in securities or related issues mentioned here. SIG, its capacity as specialist and/or market maker, may execute orders on a principal basis in the subject securities. Information presented is from sources believed to be reliable, but is not guaranteed to be accurate or complete. The research analyst primarily responsible for this report attests that the views expressed accurately reflect his or her personal views and that no part of his or her compensation was, is, or will be related to any specific views in any research report.”

Yes we own this stock. We have no way of knowing if anything we have said in the above blog is of any relevance whatsover. It is meant to represent our own personal feelings and questions and should be evaluated by anyone with the use of their own intelligence and analytical ability. Isn't it about time that analysts have to do with their own money exactly what they may be implying that other investors should do. Stay tuned…

Friday, September 3, 2010


For quite a few years the eulogies of Sanford Bernstein appeared on the AllianceBernstein webpage. It seems that after Lew Sander’s departure from the firm, where he was escorted out by security, the eulogies about the founder were removed from the corporation’s website.

I decided to search my files and read the eulogies that were published in a special booklet that was sent to me by Roger Hertog in 2005 with a hand written note saying “You were there…”

Upon rereading what I originally thought was an emotional and positive eulogy; this rereading directed me to a new conclusion. I think I now can understand why the eulogies may have been removed from the Alliance website considering the professional conduct expected from today’s executives.

After all, look at what just happened to Mark Hurd of Hewlett Packard. I am not saying I support the decision of the Hewlett Board of Directors in any way shape or form, but Mark Hurd’s transgressions seem to be a lot less debilitating than those of Bernstein, with the possible exception of the expense account fiasco.

Reviewing Roger Hertog’s eulogy we came upon the following choice of words:
1. “Everyone had a Zalman story. Some are humorous, some inspiring, and some are even terribly embarrassing.”
2. “He smoked big, ugly-stinky-cigars, maybe a dozen a day.”
3. “He was hungry for life and had a voracious appetite-for food, for sex, and for achievement.”
4. “He was totally uninhibited talking about his life and yours. From the most personal details between a husband and wife...”
5. “These conversations, more like monologues, would be filled with a constant stream of sexual allusions and profanities.”
6. “In a flash of impulse, he (Bernstein) literally jumped on the table-all 200 pounds of him-and was suddenly peering down from above. It was outrageous-this giant of a man was walking up and down this table pointing out numbers with the toe of his shoe.”
7. “He could be angrier than any person I knew.”

Lew Sander’s used the following statements in his eulogy about Bernstein.
1. “Sandy seemed to thrive on turbulence. Tranquility, consensus, made him anxious.”
2. “He liked to stir up the pot.”
3. “He adopted a lexicon consistent with this feature of who he was. It was one of hyperbole, extremes, sexual analogues wherever they seemed germane-no, let me revise that-sexual analogues whether they were germane or not. And of course, expletives to punctuate his point…”
4. “The sexual analogue, of which there hundreds.”
5. “I will miss him. Not all of him…”

What are the secrets that have been hidden? All of the eulogy commentaries seem to be related to thirty years ago. Why wasn’t there any recent commentary in the eulogies? Did he just disappear into religion? From the lack of any new information on Bernstein, is it possible he had an illness before his lymphoma or was he just relegated to a figurehead in some negotiation after I left the firm. In any case, I wonder if they would remove the Bernstein name totally from the AllianceBernstein website if they could. Stay tuned…

Monday, August 23, 2010


I have been asked by several people why I setup this website after all these years. The answer is quite simple. My reputation has been tarnished by my exclusion from the history of what is now known as AllianceBernstein. It looks as if it was further tarnished by what seems to be indirect innuendo expressed by Lewis Sanders, in the eulogy he delivered at Bernstein’s funeral.
Not much goes with you when life is over, but who you were and what you represented, namely the realities of your life, should be honest. Stay Tuned..

Friday, August 20, 2010


At Sanford Bernstein’s eulogy, Lewis Sanders seemed to have a lot of hubris and ego as he recited from a memo he claims to have written to Bernstein in 1971. He stated that his memo said “the firm was basically an embarrassment, that it was largely populated by people who were either intellectually impaired, highly neurotic or both…Moreover, the environment was hostile, volatile and not conductive to personal growth, except as training in psychiatric medicine.”
To be very frank and perfectly honest, looking back at the early history of Bernstein there really was only one main crazy, neurotic, hostile and volatile person. And yes, though smart, that person was totally off the wall. At this point I choose to not name this person directly. Since Lew Sanders worked under me as I was President of the company, I have to wonder who he was referring to in his eulogy. Stay Tuned...


While working on my website I came upon an article which referred to Lewis Sanders as a “legendary” investor. I thought about these words for a while then decided if there was anything legendary about Sanders as an investor; it certainly did not seem to me to be client performance. (If the writers or anyone else who refer to him as legendary, based on what I presume to be his performance record, would be kind enough to enlighten me as to how they have applied the term legendary, I would be more than happy to correct my views accordingly).
His approach to money management seemed typical. The equities looked to have been generally invested into about 50 to 75 stocks pretty much equally weighted, with some being a little more and some being a little less. There seems to be some sector pluses and minuses. This is the method that many equity money managers employ. Performance credit looks to be ascribed for what seems to be primarily based upon the performance of the overall market. Seemingly the marketing assertion was that a tweaked dividend discount model and thick research reports were being used to determine investment selections. The black book research, created in 1968 according to the Alliance Bernstein timeline[1], probably did not account for a huge percentage of the stocks being selected. (It would be great to see this tabulated.) The company’s website stated that the “brain trust” was out to build sell side research.[2] In that timeline there appears to be no mention that they were out to build money management research. I wonder why.
Mr. Sanders is obviously aware of the concept of R-square in which the likelihood of about 70 stocks in a diversified portfolio performing in line with the market is in excess of 90%. It seems Mr. Sanders simply found a way of investing the client’s money in a typically diversified manner overlaying the concept of a sophisticated model and lengthy research when the reality appears to me to be much more simplistic.
Personally I can find little reason to attach the adjective “legendary” to Mr. Sander’s public investment record and wonder why writers would make such a claim. I am completely open to any comments or feedback on this issue. In a coming release we will discuss this investment record with some attempt to clarify Mr. Sander's claim of a forty year track record.[3]As I recall, during the 1968 thru 1980 time period Mr. Sanders had little to do with the Bernstein money management other than an early attempt to build a research department. We will also review about twenty other years of performance records that Mr. Sanders is credited with and see what they indicate. Stay Tuned…

Thursday, August 5, 2010

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