CNV3-I1-17-Book Review

The letters in “Dear Chairman” are structurally identical and they are written by investors in public companies sometimes addressed to the management of those companies and sometimes to other investors, telling them what to do. While the first few chapters of the book are admittedly slower and perhaps not as intriguing, it pays off to keep reading as the back half of Dear Chairman is full of interesting anecdotes.  Additionally, the appendix of some never-before-published activist letters offers a rare look into the minds of some of history's great activist investors.

Our interesting Chapter on Dan Loeb of Third Point because he's the most modern incarnation of an activist profiled.  Not to mention, his exploits make for a great story, as the book examines his journey from 'Mr. Pink' on an online message board to the scathing letters he's penned to companies.

Another Chapter in the book features Carlo Cannell of Cannell Capital.  He has become more known in recent years as well for his, shall we say, 'choice' words for public company executives (he famously blasted Jim Cramer and TheStreet.com recently).

This book is for aspiring activist investors who would certainly by way of getting more insight into the 'behind the scenes' of board rooms.  This book on historical situations shareholders activism in general.  Some of the interesting letters include:

·         Benjamin Graham’s 1927 letter to John D. Rockefeller Jr., which advocates for excess-capital distribution;

·         Warren Buffett’s 1964 letter to American Express president and CEO Howard Clerk, a turning point in Buffett’s career;

·         Ross Perot’s 1985 letter to Roger Smith, chairman and CEO of General Motors, which exemplifies Perot’s candid, in-your-face style.

These letters give insight into how shareholder activism can both benefit and harm companies. The stories are actually quite entertaining with embedded messages.