Author Topic: SHLD - Sears  (Read 2407044 times)

Paarslaars

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Re: SHLD - Sears
« Reply #8740 on: January 10, 2017, 04:39:00 AM »
But an absolutely terrible 2011/2012/2013/2014, when it was most actively discussed on the board. :)


KJP

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Re: SHLD - Sears
« Reply #8741 on: January 10, 2017, 06:18:32 AM »
But an absolutely terrible 2011/2012/2013/2014, when it was most actively discussed on the board. :)

I think Fortress Paper is exactly the kind of company Picasso is talking about.  It's a deeply cyclical, capital-intensive business, so not likely to be a "hold forever" kind of investment, regardless of what you think of management's capital allocation skills.  But if you enter at the right time, after the company's been nearly left for dead, you can do quite well.  This isn't the place for an extended discussion of Fortress Paper, but I think there's a good argument that one of those times is right now, though I'm sure there have been people saying that for years.

As Picasso also mentioned, there are many ideas like that on VIC and this board.  If you went back two or three years and read six months of VIC writeups from that time, I suspect you'd find a few ideas that didn't "work" in the timeframe suggested and have been abandoned, but are good investments now.   

Cardboard

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Re: SHLD - Sears
« Reply #8742 on: January 10, 2017, 08:22:08 AM »
Most stocks are like this and if you look at small caps and micro caps where one decision by management or a single change in the business can easily change the value of the business by 50% you get huge swings in price.

Most of the posts about an idea are a good starting point to uncover value or similar to using a stock screener. They may or may not work right away depending mostly if the business is about to see an upswing or downswing. Then you have a myriad of factors that may make the idea much better or much worse than envisioned. It is tough to call the future but, you have to at least have an idea as to what can go right or wrong.

The ideas that receive the most posts seem to be: complicated/controversial stories, stocks known to everyone. I would not dismiss them right away simply because they are discussed a lot.

However, I would say to avoid businesses in a secular decline or companies that have not grown yearly sales organically for many years. If we could determine how many of these have been discussed on the board over time and how many have seen a rising stock price, I think that we would find a very low percentage.

I think that is the main issue with Sears and it does not appear that it will turn around anytime soon, if ever. I am not sure why an insider such as Lampert and who had experience with other retailers such as Autozone could not see that. A lot of the real estate and brands value has been cannibalized by this apparent incessant desire to turn this around. Pulling the plug in 2010 or 2011 when real estate values had gone back to a reasonable level, the economy was better while their operations still indicated forward declines and losses would have been the right thing to do.

Cardboard

scorpioncapital

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Re: SHLD - Sears
« Reply #8743 on: January 10, 2017, 08:49:37 AM »
Sears is operating a bit like the Fed or any run of the mill Ponzi Scheme - or any company in trouble if confidence disappears. Some have criticized Lampert for saying he is working on a turnaround and that his actions to maintain Sears turnaround are delusional. But I think those who say this are naive to believe the literal word. Not because Sears won't go belly up but because they misunderstand the psychology. He *must* say these confidence building statements even if he doesn't believe them and believes the exact opposite. This is because he is in a time-sensitive game of keeping Sears going as long as possible , probably to some degree so that he can redevelop the real estate. He is forced to reach this conclusion, perhaps against his will. But his act of trying to maintain confidence in Sears is in my view 100% rational. Of course the more times you call Wolf the less you are believed, but you certainly have to keep saying it.
« Last Edit: January 10, 2017, 08:52:00 AM by scorpioncapital »

Cardboard

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Re: SHLD - Sears
« Reply #8744 on: January 10, 2017, 10:20:46 AM »
Makes zero sense. If you know and realize that the company is heading downhill, you don't make statements for years and years. You act. And that means shutting down all stores, all at once if there is no way to make a business plan that only retains those that are profitable.

The guy appears in denial and the article points as such. The longer he waits, the worst it gets and with the rapid growth of online retail, it is getting worst overtime to realize the value on the real estate.

OR maybe that he got it and realized that he waited too long to do the above. Now the only solution is to keep repeating this lie to delay the death spiral and to screw other stakeholders by doing various spinoffs and offering secured debt.

Cardboard

longinvestor

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Re: SHLD - Sears
« Reply #8745 on: January 10, 2017, 10:44:35 AM »
When a guy with a reputation meets a poor business....

John Hjorth

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Re: SHLD - Sears
« Reply #8746 on: January 10, 2017, 11:03:30 AM »
Somehow a funny post, scorpioncapital,

I don't think Mr. Lampert can "tell a fairytale" to any fellow board member on here. Personally, I think the SHLD longs on this board do their own homework on this.

This is to me a turnaround - one out of many -, that has actually never turned.

Mr. Lampert has had his shot at this. The content of some the last posts in this topic to me actually indicates, that Mr. Lampert is actually deluting him self.

I have had many clients over the years where management and owners  actually considered yearly closings as some kind of exams [not only with regard to financial performance, but also with regard to a follow up compared to set plans] How many attempts to pass has Mr. Lampert now granted him self?

With reference to cardboards latest post in this topic: It's never too late to just pull the plug [and thereby admit you were wrong] - and move on.
« Last Edit: January 10, 2017, 11:06:07 AM by John Hjorth »
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BargainValueHunter

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Re: SHLD - Sears
« Reply #8747 on: January 10, 2017, 05:18:23 PM »
This thread is long...

...but it could be longer.  ::)

So in that spirit, imagine Lampert calls you up and says, "I've seen that long discussion about me and Sears on CoB&F so I ask you big fella...what would you do with Sears Holdings if I handed the keys over to you?"

Albert Einstein called compound interest "the greatest mathematical discovery of all time".

DooDiligence

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Re: SHLD - Sears
« Reply #8748 on: January 10, 2017, 05:28:42 PM »
This thread is long...

...but it could be longer.  ::)

So in that spirit, imagine Lampert calls you up and says, "I've seen that long discussion about me and Sears on CoB&F so I ask you big fella...what would you do with Sears Holdings if I handed the keys over to you?"



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Mephistopheles

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Re: SHLD - Sears
« Reply #8749 on: January 10, 2017, 05:36:16 PM »
Makes zero sense. If you know and realize that the company is heading downhill, you don't make statements for years and years. You act. And that means shutting down all stores, all at once if there is no way to make a business plan that only retains those that are profitable.

The guy appears in denial and the article points as such. The longer he waits, the worst it gets and with the rapid growth of online retail, it is getting worst overtime to realize the value on the real estate.

OR maybe that he got it and realized that he waited too long to do the above. Now the only solution is to keep repeating this lie to delay the death spiral and to screw other stakeholders by doing various spinoffs and offering secured debt.

Cardboard

+1

The argument that it's better to keep stores running at losses rather than shut down as fast as possible never made sense to me. Then they say, well some of them are profitable; well keep them running then! But so far after hundreds of store closures SHLD continues to burn money. People don't seem to be thinking dynamically, that those stores are only profitable now because of the scale, but they wouldn't be stand alone.. so just shut the god damn thing down, all of them.

Probably the same people who defended Eddie for keeping the stores open since it's "emotionally difficult to lay off all those people". Yea, meanwhile he screws over his own shareholders and makes shady financing deals on top of that. There is no excuse. He's not delusional; imo he personally (and ESL) will end up just fine. It makes me concerned as a SRG holder to be honest given the recently announced financing there, but it makes me feel a bit better that Buffett is an owner.