Eddie Lampert's Troubles: It's Not Just Sears

Yesterday, we highlighted the miserable performance of Sears Holdings (SHLD) over the last several weeks.  Since SHLD is most often associated with Eddie Lampert, we looked to see how the rest of the stocks in his portfolio have been doing. 

Lampert's hedge fund is called RBS Partners, and based on its holdings at the end of the third quarter, the fund will have a long way to go before it ever hits its high water mark if it has one.  At the end of the quarter, the market value of RBS's equity holdings was over $11 billion. With the quarter just over half over, the market value of those holdings is now down by 54% to $5.3 billion.

click to enlarge

 

Below we show the fund's holdings as of the end of the third quarter and their changes so far during the fourth quarter.  While SHLD gets the most attention, it hasn't been the worst performer.  As shown, Hartford Insurance (HIG), Fannie Mae (FNM), Citigroup (C), and CIT Group (CIT) have all lost 70% of their value this quarter.  Getting back to SHLD, though, while it is the stock most often associated with Lampert, if there was no change in his fund's holdings since the end of Q3, it would no longer be his largest holding. 

While SHLD made up 53% of the fund on 9/30, given its 68% decline so far in the fourth quarter, today the stock would only have a weight of 37.4% in the portfolio.  Based on current prices, Autozone (AZO) would now be the fund's largest holding.  That stock has seen its weighting increase from 24.4% to 38.4% just because it has only gone down by 28%.

Comments

[syd s:]

it is really horrible to see a company like sears go down the tubes. unfortunately it all started when mr. lampert took over. he was not interested the business. all he was interested in was the real estate. i shop at sears and i can go in to the store and there are more sales people than customers. i speak to many people and they say they are affraid to go to sears to make a major purchase. there print ads have all but disappeared.people look for these ads.lets hope that sears can survive.

2008 Nov 21 10:29 AM

[investor88:]

Good analysis, throws light on holdings of RBS Partners that is not generally known. With hindsight a cut loss strategy is most appropriate but then cut loss is not in the value investor's vocabulary who might even buy more at lower prices.

2008 Nov 21 10:32 AM

[helplessobs...:]

Lambert's portfolio is as amateur as Bill Miller's. Each should be flipping hamburgers at MCD instead of destroying shareholder's wealth on Wall Street.

2008 Nov 21 10:54 AM

[Bill Hader:]

Mr Lambert will also see AZO shares fall. The business model is that of tanked business. You can not keep cutting trained staff for no staff to less trained staff. Customer Service suffers. IE C.City. Hope the zone can hang on, But understaffed stores says a different story.

2008 Nov 21 09:30 PM

[SteveD64:]

It is a very encouraging thought that the so called "pros" don't have any better ideas than I do....

The only difference is I do take my stop loss if I am wrong....

But, then of course, I am trading with my own money, not OPM....makes a huge difference....LOL...

2008 Nov 22 08:47 AM

[MrsLinarcos:]

I used to work for Sears in the good times, now you couldn't pay me to work there. In fact ole fast Eddie would probably find a way to pay $4.00 under the minimum wage if he could. I expect SHLD to go completely under in about 6 months.

2008 Nov 22 10:56 AM

[capital pains:]

2 years ago when Cramer was screaming (his usual manner of speaking),
I e-mailed Cramer. SHLD was $165 approx at the time. I challenged Jim
with the following: "Any time in the future,minimum 6 months out to any date in the years to come, you pick the date Jimmy, I will bet you $100,000 that SHLD will be lower than your screaming buy price
of $165..Of course, I never received a reply, Not that I am smarter than Cramer, or prescient in any respect. But, when Lampert (the supposed genius), combined 2 dogs, aka: Sears + K Mart, combined these 2 losers
to form his imagined real estate empire, and formed SHLD, you had to be
deaf, dumb and blind not to know SHLD was a giant loser.
How the mighty have fallen !...Lampert has plenty of real estate now valued at 50% less than when he went haywire years ago, and he has
the empty big-box retailers KMart + Sears. SHLD will go under eventually
but Cramer, unfortunately, will keep screaming forever !
The market is humbling..Egotists like Lampert, who care not one whit for employees, are simply getting their just desserts. There is a God !!

2008 Nov 22 12:29 PM

[oldgoldbug:]

My experiences with Sears as a customer and an employee have not been good. From the mid 80's on it acted like a company with no ethics (although how many actually are ethical?) Now it tough times, the loyalty just isn't there anymore.

Too bad the authors didn't publish this list 6 months ago - it is an impeccable short list.

2008 Nov 22 12:31 PM

[notsosmart:]

LOL. sears has not had astore in my town of stamford ct. for over 25 years.yet every weekend the have a color insert of retail items on sale. the closest store is over 30 mi. away in danbury.when they were here i stopped going because the service was awful. the attitude of a salesperson awful when you could find one.bear in mind the greenwich,stamfor,dari... corridoris one of the wealthiest in the country.why anybody would shop there is a mysteryto me.i could be wrong as i have not bought there in about 20 years.

2008 Nov 22 01:11 PM

[kurt walter:]

I heard Eddie has been buying Fannie Mae down here. Is that true? If it is he has lost his mind. The Fannie common stock is going to be worthless. What does Eddie's buddy, crazy Cramer, say about this mad money?

2008 Nov 22 01:27 PM

[notsosmart:]

weird.why would anybody watch cramer?

2008 Nov 22 03:01 PM

[derwent:]

Comedy!


On Nov 22 01:27 PM kurt walter wrote:

> I heard Eddie has been buying Fannie Mae down here. Is that true?
> If it is he has lost his mind. The Fannie common stock is going to
> be worthless. What does Eddie's buddy, crazy Cramer, say about this
> mad money?

2008 Nov 23 11:55 AM

[ellep:]

Cramer is right up there with Suzi...why would anyone watch these idiots?

Apr 09 07:55 AM