This is Samuel Eisenstadt, former Research Chairman at Value Line Inc.
Yesterday at about 5 PM, December 5th, 2009, Howard Brecher, present CEO of Value Line, called me at home at about 5 pm to tell me that my services
were no longer required at the company.
Howard Brecher suggested I should answer any public inquiry
by saying that I retired. I do not agree to do that. I did not retire. I was let go without warning. No cause was given.
Due to the timing of this event, I will state what is already well
known to anyone following VL's current SEC charges of wrongdoing. I am not named in any documents in connection with the case; never was; never expected to be; was accused of nothing; so I do not want anyone to have any impression to the contrary.
Good luck to all Value Line employees, to whom I wish a better ending than mine. And finally my best wishes to the readers of Value Line, our subscribers and others, who it has been my pleasure to serve the greater part of my life.
On Dec 4, 2009, I had recommdended to Buttner & Brecher that we raise our recommended invested position, which has been indicated by our Asset Allocation Model. At the time, the invested position was 60-70%. Currently, it should be at about 80%-(VL is still at 60-70%). Since Dec 4th, the S&P 500 has risen about 7%. This was not the first time management had vetoed an allocation recommendation.
So much for "Totally, Independent, Objective and Unbiased".
Sam, having attended many investment committee meetings with you, I can confirm that your recommendations were often not followed. What's worse it that the counter arguments were rarely based on science. What I did not know until I became a fund manager, and I presume you did not know, is that Buttner with the assistance of her crew (Henigson, Winicki, Brecher, Anastasio, Tencic, Brooks, Grant, Stock, Wong, Lowenstein, Parker, Cella, Trevino, Brewer et al) was reaping millions through via bogus transaction fees, missappropriation of 12b-1 fees, payment of inflated vendor invoices and so on.
Because many of the equity fund managers (past and present) were well aware of questionable activities and either remained silent and or moved on to other fund companies or positions, the final chapter has yet to be written.
I can say for certain that the New York State Attorney General and the Internal Revenue Service are well aware of certain irregularities at Value Line.
Congratulations to the distinguished group of Value Line Alumni on their annual get- together this evening (1/12/2010).
After all, is there a greater honor than being fired by the likes of Howard Brecher (the current CEO) or Jean Buttner(the banished CEO) or as in my case, both of them?
A Happy New Year To All!
I see. Well I am serious but learning about the company and so have made a small investment with some shares. I have read Eisenstadt's post and replies to it on this MB. I've read about the management's problems the SEC. But I also see a company with no debt, with a good but tarnished name, and with shares near all-time lows.
DaBreeze is right, 95% of the Value Line employees have always been completely expendable. That still leaves the 5% that kept the company together and I think most
of us who know the company and Sam would agree that he was in that group. I don't think management for the last 20 years makes the cut.
Where DaBreeze is wrong is that Value Line is not a great investment; it is a family company lacking leadership. Also Value Line is not Wall Street, it is a publishing company. Is Morningstar Wall Street?
dabreeze says "this isn't about an 88 year old man that should have retired 20 years ago...this is about an investment"
An Investment? What gave you that idea?
For the last 23 years Value Line did not invest in its own expertise -- that is the great tragedy and legacy of former CEO Buttner and her accomplice in crime, Henigson.
You think it is "time to cut the fat. It is part of what happens on Wall Street and everyone knows it."
If Eisenstadt was fat, then Wall Street has no bone. Buttner and Henigson were the destroyers of this business. It took over 20 years of determined mismanagement to bring the company to its near-death pointlessness.
You suggest "If you don't like it maybe you and all the other VALU rejects should go start up a new firm"
We already know how well that can work.
Morningstar took the Value Line concept and worked it. In 2008 Morningstar reported revenue of slightly more than $500 million and a net profit of $100 million.
Value Line saw its revenue decline to what? $70 million?
Value Line's revenue figure includes both subscription revenue from publications and management fees from its mutual funds, which were run into the ground.
Maybe you should compare Value Line asset management with other asset managers.
Better assets-under-management figures could have been achieved by a shrieking Rosie O'Donnell.