Richard Shinnick

Sears May Not Be Berkshire, but It's Worth Buying on Weakness

You wrote:
"If the company could earn $9.00 per share again (the result for FY06), what would the stock be worth? The company was buying back stock at $131 based on expected earnings of $7-8 or so. I think the shares could eventually move into that range again, but it's hard to say for sure at this point."

This, to me, is why Sears Holding is not a buy. 2006 was for all intents and purposes the pinacle of a housing and real estate bubble that Lampert sold in to. Unfortunately, he also bought in to it as well at $131.00 per share when the stock is now trading at about 35% less, not a brillant use of capital in hindsight.

Also, what "tricks" could Lampert have up his sleeve, I read in the 10-Q about the total return swaps he invested in, but if I read it right he LOST money on those. What "tricks"? See that is the thing, everyone who promotes this stock expects this guy to pull a freaking rabbit out of his hat while at the same time comparing him to Warren Buffett. Buffett did not pull any rabbits out of his hat, he bought under-valued businesses and held them for years and years and years and he had a great advantage over Lampert, NOBODY including him knew he was "Warren Buffet" when he was 42 years-old so nobody valued his holdings with expectations of magic tricks.