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For those of you that buy individual stocks
Old 04-06-2005, 02:31 PM   #1
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For those of you that buy individual stocks

OK I am trying to figure out what Eddie Lampert (labeled as being the next Warren Buffet and the guy is good) is going to do with his new project, i.e. the Sear's Holding Corp. I would be the first to admit that I would never touch it if it were just going to be a retailer consisting of the two entities. But if Lampert is going to use the holding company as his investment vehicle then we should look a bit more closely right? He has $23/share in cash to play with, he has already approved cost cutting measures and I am guessing he will do something with the Land's End apparel company (albeit spin-off or sale). He is really trying to squeeze the cash out of the businesses (even though they may be sub-par) but the question is what will he do longer-term with the holding company? Is this BRK part 2 (or the next closest thing) or just the marriage of 2 retailers?
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Re: For those of you that buy individual stocks
Old 04-06-2005, 03:50 PM   #2
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Re: For those of you that buy individual stocks

I think he's trying to compete with the Danahers.

I agree that Lampert is focused on the cash. But why is he hiring retailing consultants by the bucketful-- to turn around Sears or KMart first? (As the homecoming sailor said in the brothel-- "Gee, where do I begin?!?") How did Lampert account for all the money Sears was paying KMart for the store closures? How much money & stock options did all the Sears & KMart executives (Lampert included) take home as a result of this deal? When will the two chains report consistent year-over-year sales growth like Wal-Mart & Target?

I remember when Scott greeted Chainsaw Al with the same fervor. The stockholders, anyway, certainly not the employees.

While $23/share is nothing to sneeze at, SHLD closed at $138 today for a 16.7% cash ratio. OTOH Berkshire Hathaway has an equivalent 1,539,000 "A" shares outstanding at $88,300/share and $40B in cash for its own ratio of 29%. And BRK made money last year, too.

I'm gonna leave my bets riding on Buffett.
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Re: For those of you that buy individual stocks
Old 04-06-2005, 08:31 PM   #3
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Re: For those of you that buy individual stocks

Calling Brewer & Berkshire Bull.....
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Re: For those of you that buy individual stocks
Old 04-06-2005, 09:41 PM   #4
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Re: For those of you that buy individual stocks

What interests me about conjecture like this (and I do some of my own), why is it only the KMart / Sears situation that got people interested. He has major positions in AutoNation and AutoZone as well.
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Re: For those of you that buy individual stocks
Old 04-06-2005, 10:12 PM   #5
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Re: For those of you that buy individual stocks

Well it's like this....would you rather have bought Berkshire Hathway when Buffet first started or would rather have bought the same stocks as Buffet along the way? I guarantee you would have come out better by doing the first option & people are speculating that Lampert is in the process of doing the same thing with Sear's Holding Corp...i.e. it will become less and less of a retailer and more and more of an investment vehicle. Buffet started with a textile company
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Re: For those of you that buy individual stocks
Old 04-07-2005, 04:04 AM   #6
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Re: For those of you that buy individual stocks

Hey, I did the same thing. I bought a manufacturing
company and turned it into a holding company
(except we own no stocks). Anyway, our total holdings
wouldn't even be "cab fare" for Buffet. Looking
back, the whole process (took almost 10 years start
to finish) was kind of fun. Wouldn't want to go through
it again though.

JG
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Re: For those of you that buy individual stocks
Old 04-07-2005, 07:11 AM   #7
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Re: For those of you that buy individual stocks

Yep

Every year about this time - I swear I'm going to clean out my file cabinet of Drip stocks(49 this year - tax apptmnt 1100 AM today) - but like some with golf - it's fun. When it ain't - well my neighbor caught 5 white trout and a flounder under his pier lights night before last - so, so in his humble opinion.

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Re: For those of you that buy individual stocks
Old 04-07-2005, 08:58 AM   #8
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Re: For those of you that buy individual stocks

Quote:
Yep

Every year about this time - I swear I'm going to clean out my file cabinet of Drip stocks(49 this year - tax apptmnt 1100 AM today) - but like some with golf - it's fun. When it ain't - well my neighbor caught 5 white trout and a flounder under his pier lights night before last - so, so in his humble opinion.

We worked all weekend on the taxes, just to get ready for the accountant. Waiting to hear the damage. Anyway, between hormones, free time, and enjoying the hobby, my husband still goes for the individual stocks.
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Re: For those of you that buy individual stocks
Old 04-07-2005, 12:32 PM   #9
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Re: For those of you that buy individual stocks

I didn't like KMart holdings at first, but I'm beginning to think that EL really knows what he's doing. The only thing is that SHLD is already a $20bil company so as far as SHLD becoming the next Berkshire, I doubt it given it's size right now. KMart was a slam dunk out of bankruptcy but where they're sitting now their opportunities are priced into the stock. I don't know how excited I am about Sears either. Where does Sears fit in between Lowes, Home Depot, and Wal-Mart? Sears has some strong brands but I don't see their craftsman any stronger than Snap On or Stanley. Their Kennmore is no better than Whirlpool or Maytag. I wouldn't bet against EL but at the same time I'd be reluctant to buy him. I like growth stocks right now since everyone is a "value guy" and by growth I don't mean high-tech I think someone like Buffett only comes along once in a long long time, and history would tend to agree with me.
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Re: For those of you that buy individual stocks
Old 04-07-2005, 03:46 PM   #10
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Re: For those of you that buy individual stocks

I think the Sear's brands are much stronger than you give them credit for & I am sure many people would back me on that one. Agree they are not a buy at this level but it should be interesting going forward. Lampert has a lot of red tape to work around but they are a lot of things he can do with this entity to raise cash. He will pick apart the businesses & I don't think he will be left holding what it is now. Like I said I am trying to figure out what happens past that phase.
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Re: For those of you that buy individual stocks
Old 04-07-2005, 08:12 PM   #11
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Re: For those of you that buy individual stocks

AutoZone on the other hand looks like a good buy, but I've always got less money than ideas. If you wanna play EL do it through AutoZone.
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Re: For those of you that buy individual stocks
Old 04-08-2005, 09:05 AM   #12
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Re: For those of you that buy individual stocks

Passed on AutoZone when it was $28

Investing in stocks is like fishing....the one that got away
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