Lemelson Capital Management’s letter to Wall Street Journal Editor Daniel Fitzpatrick Describes October 27 Profile on Emmanuel Lemelson as “Directory of Fallacies”

Marlborough, Mass., November 2, 2015/PR Newswire/–Lemelson Capital Management, a private investment management firm, today released the first of two letters to The Wall Street Journal, addressing systematic factual errors, biases and major errors of omission contained in the newspaper’s October 27, 2015 profile of Lemelson Capital Management chief investment officer Emmanuel Lemelson.

The first letter, sent to Wall Street Journal editor Daniel Fitzpatrick who oversaw the reporting of reporter Rob Copeland, who authored the article, appears below:

November 2, 2015

Mr. Daniel Fitzpatrick
The Wall Street Journal
1211 Avenue of the Americas
New York, NY 10036

Dear Mr. Fitzpatrick:

Rob Copeland’s recent Wall Street Journal article (“Hedge Fund Priest: Though Shall Make Money,” p. C1, Oct. 27, 2015) reads like a directory of fallacies. Inductive reasoning is used throughout to shift between affirming the consequent, begging the question, poisoning the well and equivocation to set up both false causes and false dilemmas in his story.

Mr. Copeland conveyed his understanding that participation in the endeavor was predicated on the article being focused of the life of the church, or alternatively the importance of wise investment policy within the context of a Christian ethic.

Mr. Copeland was given access based on his representations that, as his editor, you (a self-declared faithful Christian respectful of the church) would be overseeing every aspect of the story. I was surprised to learn subsequently that, like so many other misrepresentations, you had not been presented with any of the background correspondence related to the article.

What was published was a thinly-veiled ad hominem attack based apparently on Mr. Copeland’s personal feelings, the insinuation and innuendo of which are wholly unsupported by evidence.

Major errors of omission, mischaracterizations and altered quotes, which I will be detailing under separate cover, are used throughout his article.

Mr. Copeland went to great lengths to suppress evidence –that is, to present only the pieces of evidence that supported his underlying thesis, while omitting the ones that contradicted it – in an effort to draw readers to his personal conclusions.

On two occasions, including during a phone conversation a few days before the article’s publication, Mr. Copeland stated that he had the ability to assign negative readership opinion to subjects if he did not get what he wanted (in this case, material non-public information on The Amvona Fund, LP), going as far as to represent that he already had the information he was seeking when he did not.

Is this the standard of reporting and ethical principles to which The Wall Street Journal aspires?

+ Emmanuel Lemelson

Lemelson Capital Management, a private investment management firm, today released the second of two letters to The Wall Street Journal, documenting fourteen of dozens of major factual errors and omissions contained in the newspaper’s October 27, 2015 profile of Lemelson Capital Management chief investment officer Emmanuel Lemelson.

The letter, sent to Wall Street Journal editor Daniel Fitzpatrick who oversaw the reporting of reporter Rob Copeland, the article’s author, appears below:

November 2, 2015

Mr. Daniel Fitzpatrick

The Wall Street Journal

1211 Avenue of the Americas

New York, NY 10036

 

Dear Mr. Fitzpatrick:

 

Rob Copeland’s recent Wall Street Journal article (“Hedge Fund Priest: Thou Shalt Make Money,” p. C1, Oct. 27, 2015) contains dozens of factual errors, misstatements and major errors of omission amongst a litany of insinuation and innuendo. Among them are these fourteen significant errors (in order of appearance within the article):

 

1.) Mr. Copeland wrongly insinuates that I labeled Benjamin Graham’s book, The Intelligent Investor, “the good book.” I never used that phrase, which of course is commonly associated with the Bible.

 

2.)    I have never boasted of “crashing stocks” in between sacraments, as he reports, and in fact would never allow my service to the church and the faithful to be interrupted by my lay vocation.  He describes me as a “traveling priest,” but that too is wrong. I have been assigned for the past six months to a parish in Keene, New Hampshire, where I have served continuously. I also have served the Greek Orthodox Metropolis of Boston without interruption for the last 18 months.

 

3.)    He maligns my lay vocation as a hedge fund manager with an allegation that the hedge fund industry “operates with almost no official scrutiny.” That’s also not true. The Amvona Fund, LP, like all funds in the industry, is regulated by the Securities and Exchange Commission (SEC) and we adhere rigorously to its extensive reporting, accountability and transparency standards. This year, we expect to spend at least $70,000 on outside legal and compliance fees to ensure we meet these regulatory requirements. We also are governed by numerous state regulations where we have investors.

 

4.)    Mr. Copeland oddly and inaccurately charges that I “live a distinct double life.” That would be surprising to anyone who knows me professionally or personally. My investors and hedge fund colleagues are fully aware of and have been supportive of my role in the Greek Orthodox Church, while my work as a hedge fund manager and as founder and president of The Lantern Foundation has been encouraged by the church. In fact, I even stated in my taped interview withThe Wall Street Journal, in response to a question, that I am not living a double life and that every aspect of my life has been completely open to all.  No aspect of my life is secret, illegal or immoral, or otherwise representative of anything warranting the disparaging label of someone “living a double life,” as Mr. Copeland wrongly reports.

 

5.)    He writes inaccurately that I am a disciple of Warren Buffett, who he heretically labels a “near deity.” In fact, as I state clearly in the video interview I conducted with The Wall Street Journal (but which was omitted from The Wall Street Journal’s final video edit), I do not agree with Buffett, much less consider myself a “disciple” of him. By using theological terms such as “deities” and “disciples” to describe secular topics, he demeans my religion and person.

 

Mr. Copeland writes that The Amvona Fund charges a performance fee that “is well above the hedge fund norm.” That’s also not true. But it is true (which he fails to report) that The Amvona Fund management fee of a mere one percent (which does not even cover the full expense of operating the general partner) is considerably below industry averages, which are roughly twice that of The Amvona Fund. Additionally, in attempting to wrongly depict the fund as having higher than normal fees, he fails to mention that the fund’s performance allocation is subject to an extremely investor-friendly six percent hurdle rate, which is nearly unheard of in the industry.

 

6.)    He writes that The Amvona Fund “usually wagers on relatively unknown individual stocks rising.” That’s also inaccurate. Every single one of the fund’s long investments is in public equities traded on one of the world’s two major stock exchanges, the New York Stock Exchange (NYSE) and NASDAQ. Additionally, the overwhelming proportion of the fund’s realized and unrealized gains have come either from highly successful investments in highly recognizable large-capitalization stocks or from selling short common equities.

 

7.)    I have never said I was “eager to expand,” as Mr. Copeland inaccurately reports. In fact, I have said repeatedly that

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