Author Topic: SHLDQ - Sears Holdings Corp  (Read 2666150 times)

John Hjorth

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Re: SHLDQ - Sears Holdings Corp
« Reply #9180 on: October 10, 2018, 06:23:48 AM »
... and I still like to dumpster dive, ...

Here, this kind of activity [translated to English] is called "container archeology" - fits perfect here. [ : - ) ]
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ajc

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Re: SHLDQ - Sears Holdings Corp
« Reply #9181 on: October 10, 2018, 06:36:07 AM »


I wonder what lesson could be learned here
this is a classic value trap
lots of value in RE
can buy way less than 50 cents on the dollar
a great investor at the helm
yet now itís worth $0.40 in pre market

over the same period of time people would have done way better investing in FANG stocks



The lesson is management matters. A lot. What they do, not what they say.

I owned SHLD a few years ago after following for a while. Sold out shortly and for a tiny profit.
Problem was Lampert always gave my stomach knots. The value creation methods of people like Marchionne, Walton, or Malone, can be spotted in the first decade or so of their careers with reasonable personal judgement and some common sense due diligence. After that, you can invest alongside them with far more certainty and still earn great returns.

Thankfully, I realized it here early enough. Lampert clearly doesn't feel that same 'steward of capital' responsibility towards other SHLD investors. He also had no experience running a Main Street business, let alone a retail one, let alone a turnaround. He treats the company like his personal fiefdom. His capital allocation was also completely sub-optimal to anyone who looked. That seemed clear.
Sears and Kmart were not dead and buried when he got them. He could easily have sold off loss-making stores when property prices were hot, kept much of the best ones with better earnings, reinvested in the cash earning stores, put the proceeds in an ever increasing stock portfolio a la Berkshire instead of doing buybacks, done Seritage-type JVs far sooner, the list goes on and on. Shrinking in order to grow quicker and more intelligently in an area he was better at (ie. investing).

Even though retail changes quickly and the competition is brutal, he took his sweet time trying to spin or highlight any worthwhile value that the market could easily observe, and instead let the core business literally crumble.
Even the spinning and highlighting he did badly and slowly given how much value was actually there earlier on.
The amount of time and opportunity he clearly wasted was the canary in the coalmine for me and, I think, a glaring insight into how humble (or not) he genuinely was being with himself and all his various business partners.

Doesn't mean money can't be made by someone using a basket strategy with low price to asset value stocks, but on the individual security level you're better off sticking with people who are actively and obviously creating substantial shareholder value every year, or two, or three, over a sustained time frame. People who are experienced, humble, and clearly know their business and what they're doing. Turnaround experts too, if that's the situation.
It's okay to wait a while with big individual issue bets, in order to confirm that management is truly the professional and personal type you want to be in business with.
Lampert always just came off as a rich hedgefunder who wanted a personal play thing. Even, to some extent, during his better moments.


« Last Edit: October 10, 2018, 06:38:14 AM by ajc »

nkp007

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Re: SHLDQ - Sears Holdings Corp
« Reply #9182 on: October 10, 2018, 03:50:22 PM »
Is this a buy?

Spekulatius

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Re: SHLDQ - Sears Holdings Corp
« Reply #9183 on: October 10, 2018, 03:53:45 PM »
Is this a buy?

I think there are ways to get screwed that are more fun.
To be a realist, one has to believe in miracles.

Gregmal

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Re: SHLDQ - Sears Holdings Corp
« Reply #9184 on: October 10, 2018, 04:16:05 PM »
I've owned this a bunch in years prior, and it was always an awesome, predictable and profitable trade. But much like ajc mentioned, after a while it just became obvious this was doomed. I mean the stock predictably went up 50-200% at various points on nothing but insider buys, hedge funds like Baker pumping, and random jack ups of the borrow cost. But it ALWAYS came back and the operating results were never anything other than disastrous. I just dumped my monthly spec allocation in TOO options but if I was to gamble more I'd maybe take a flyer here and hope for a 30-50% bounce.

Liberty

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randomep

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Re: SHLDQ - Sears Holdings Corp
« Reply #9186 on: October 12, 2018, 01:48:19 PM »
https://www.bloomberg.com/news/articles/2018-10-12/eddie-lampert-rode-the-worst-trade-of-his-life-all-the-way-down

According to the web, Eddie's worth is down to $1.4B, wow!

As a person who watched this thread closely, I commend the people who said "the wheels were falling off the bus" years ago.  I definitely have less respect for all successful hedge fund managers now.  The likes of Eddie and Berkowitz and Chou could easily go from hero to zero in the course of a downturn.

longinvestor

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Re: SHLDQ - Sears Holdings Corp
« Reply #9187 on: October 12, 2018, 02:23:24 PM »
This is a classic case of a man with reputation and money meeting a bad business. Sears was dying as Walmart was rising. That was a hell of a long time ago. Going up against Sam Walton, with discount retailing in his DNA is next to impossible. Money managers donít stand a chance.

Ballinvarosig Investors

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Re: SHLDQ - Sears Holdings Corp
« Reply #9188 on: October 14, 2018, 10:41:09 PM »
It's official, Sears files for Chapter 11 bankruptcy.

nkp007

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Re: SHLDQ - Sears Holdings Corp
« Reply #9189 on: October 15, 2018, 05:13:18 AM »
It's official, Sears files for Chapter 11 bankruptcy.

It only took 9,195 posts! What a wild, predictable, yet irrationally hopeful ride.