After more than 30 years of ferreting out opportunities from
fast-growing companies, investment guru Robert Lutts, whose first job
was as a newspaper carrier in Salem, decided to put his strategies down
“The Great Game of Business: Investing to Win” is the
59-year-old’s first book, and it has been published by his company,
Cabot Wealth Management Inc. on Essex Street in downtown Salem. Lutts is
the founder, president and chief investment officer of the mid-sized
wealth management company.
The book aims to give advice and know-how to the novice investor.
also a refresher for seasoned professionals, he says. The book is not
long, around 200 pages, and it’s written in Lutts’ plainspoken style, in
bites that are far easier to digest than a quarterly earnings
“The book is for anybody interested in business or
investing,” Lutts said. “You can’t really separate the issue of running a
business from investing. It’s one and the same. A good investment is
really someone who is running a business well.”
Lutts learned all
about investing around the dinner table, from his late father, Carlton
Lutts Jr., who was the author of thousands of investment newsletters
called the “Cabot Market Letter.” He taught his son to read an annual
report and starting taking him to annual meetings of companies when he
Robert Lutts got his start by selling his investment services as a “branch out” of his father’s investment newsletter.
genesis of why to do it is to share with people, I think, how wealth is
made and how wealth is created by entrepreneurs in this country,” Lutts
said about why he wrote the book.
“After 33 years of doing
something, maybe you think you have a little something to say,” said
Lutts, who is also known to viewers as a regular contributor to CNBC’s
Growth companies are Lutts’ real passion — studying
entrepreneurs and the innovative part of the economy. His book takes a
close look at his growth strategy as he seeks to invest in companies
doing “new things.”
That’s opposed to the strategy of a value
investor, such as Berkshire Hathaway CEO Warren Buffett, who invests in
mature companies, like Coca-Cola, and seeks value in them if they are
able to turn things around.
“The problem with it is sometimes you
buy into an industry that is actually starting to die,” Lutts said of
value investing. “And, you know, we don’t sell buggy whips anymore.” He
cites long-gone minicomputer companies such as Wang Labs and Digital
Equipment Corp. as examples. “That whole era is gone,” he says.
The challenge with growth investing is simple: “When do you get off the train after it’s growing.”
first business venture, it turns out, was a “repeat business.” At age
12, he delivered The Salem News and The Boston Globe. He writes about
the importance of repeat business, a concept outlined by Babson
College’s founder Roger Babson in his biography. Lutts is a graduate of
“This was a profitable repeat business, one I enjoyed a
great deal, as it gave me a chance to get to know everyone in my
neighborhood,” Lutts writes about his paperboy days. “Many of those same
people on my past paper route are clients of my wealth management
company today.” He also delivered a single copy of The New York Times to
the then city solicitor, who lived in North Salem.
He also notes
that “the newspaper business has been challenged by digital media and
has had to adapt.” This means that often, a repeat business does not
mean perpetual success.
In the book, Lutts
introduces the concept of a “stemwinder,” with the term coming from the
knob you use to wind a watch or a toy.
It’s Lutts’ term for a leader “who comes to work each day and rewinds
the spring of the business with new and exciting ideas to take
advantage of new opportunities.”
He counts Sam Walton of Wal-Mart,
Ray Kroc of McDonald’s, Wayne Huzienga of Waste Management, Steve Jobs
of Apple, Jeff Bezos of Amazon and Lawrence Page and Sergey Brin, both
founders of Google, as great stemwinders.
Now, Lutts is keeping
his eye on companies in artificial intelligence, such as Google, Amazon
and Facebook. While they are large companies, they have a huge potential
Many growth companies create value not by
inventing something new, but taking existing tools and using them in
unique ways to make our life better.