Dear Mr. Berko: 

I am 73 and have a large amount of retirement money left to me by my husband, who died three years ago. I’ve enclosed a copy of the account for you to review. My broker recommends that I purchase 1,000 shares of Though the stock sounds good, it doesn’t pay a dividend. All my other stocks do, as you can see. When I expressed concern about the lack of a dividend (you always recommend buying stocks paying dividends), he said he could write options on, which would bring about 3 percent a year or more. He is very positive about this stock and thinks it can rise to $90 by next year. Please give me your opinion. 

W.L., Port Charlotte, Fla.

Dear W.L.: Inc. (CRM-$52.09) has $3.8 billion in revenue, which derives from providing on-demand customer relationship management to its clients – thus its CRM ticker symbol. And the stock could run to $90. But CRM is a gut punch for every investment professional who believes in the primacy of earnings and a congratulatory pat on the back for every Wall Streeter who promotes hype, hyperbole and hypocrisy.

CRM, which had a recent 4-for-1 split, hasn’t earned a profit in the past three years and won’t make a centime next year on expected revenues of $4.8 billion. I believe that recommending a company such as CRM, with a market cap of more than $29 billion and a CEO who was paid $106 million last year, is a mockery of every principle that defines common-sense investing. Your broker probably believes he’s recommending an investment, when in reality, he’s advising you to bet on the pass lineand put $51,000 of your retirement money in a craps game, in which the dice are loaded to favor the house. That you felt compelled to ask my opinion suggests to me that you have some doubt about his CRM recommendation. So, W.L., perhaps it’s time to consider employing a professional money manager, rather than the salesman, to manage this retirement money.

CRM provides enterprise cloud computing to businesses and industries all over the globe. The company reduces clients’ costs by supporting a common hardware, networking and software platform and then passes on a portion of that significant savings to its customers, who are eager to exchange operating expenses for capital costs. And the evidence is certainly compelling, as CRM’s $76 million in revenues in 2004 has exploded to nearly $4 billion this year, which is nearly a 40 percent annual growth rate. CRM’s revenues and its services are defined by the following divisions: The Sales Cloud division helps companies improve and expand their revenue pipeline, bring more contracts to close and improve productivity. The Service Cloud division enables vendors to connect efficiently and quickly with their customers by helping them manage their service and support requirements. The Marketing Cloud allows CRM customers to listen to conversations on public social networks, such as Twitter and Facebook. And the sales platform allows various software vendors and third-party developers to design apps in various programming languages.

Today this San Francisco-based company has 10,000 employees and more than 100,000 paying customers in more than 70 countries, yet management is unable to eke out even a teeny penny of profits on billions of dollars of revenues. It seems to me that there’s an inverse relationship between the IQ of the investing public and the price of this stock. And it also seems to me that current management, cool as a trout, is taking investors for a merry ride. CRM has lost nearly a half-billion dollars in the past three years and is on track to lose another $60 million next year.

I don’t care to discuss writing options, because is not a stock for a lady who’s 73 years young. And I’m willing to wager a dollar to a road apple that CRM’s stock price performance over the next 18 months will be a major disappointment. And again, I suggest that you consider employing a professional investment adviser, because your account has some stuff in there that makes me nervous for you.