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this. One of the advantages of the collaboration with Dave was that we were able to get DaveÆs likeable, trustworthy character to show through in the newsletter û including the fact that he was modest about investment returns. We plainly implied (rather than explicitly stated) in his newsletter that people who want incredible stock-picking performance basically don't belong with him. On the other hand, people belong with him who simply want to feel that their life savings are safe, being cared for by a trustworthy, likable, conscientious professional. This was the underlying message in every issue of DaveÆs newsletter. Eventually, Lynne's business became strong enough that she continued to follow basically her own formula for her newsletter. We were mainly wordsmithing LynneÆs ideas and doing assembly work for layout. I was concerned that her approach took unnecessary risk for her reputation, with transaction- and returns-based client relationships. It turned out that these concerns were justified. When the stock market turned bearish in 1999-2000, Lynne lost clients. In fact, even though her stock-picking saved many of her clients from suffering as badly as the stock indices, over years Lynne had created a reputation for herself as somebody who would get people incredible stock returns. Her clients were not getting incredible stock returns û her clients or anybody elseÆs. Because Lynne implicitly promised that they would get incredible stock returns with her, when they did not get incredible stock returns, she lost clients. In fact, Lynne lost so many clients that, in the first-quarter of 2001, she retired. Lynne had just stopped issuing her newsletter, because she didn't think that the newsletter could make a difference on her main problem: client attrition. The attrition continued to a point where she basically would have had to rebuild for years û and those years of rebuilding could only start after the stock market had an upward trend again. Lynne now spends much more time with her children. (The children that her clients barely knew about.) Dave, on the other hand, suffered very little attrition during those bear market days. Basically, the only attrition he endured was from clients who died, or in other cases, people who were leaving the country. Dave actually managed to maintain normal attrition, even though other investment advisors (such as Lynne) were basically losing their book. Not only did Dave continue to maintain his clientele through periods
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