Travis Johnson

Sears Holdings: Due for Underperformance?

Bill,

I agree with you -- it worries me the extent to which Sears is cannibalizing its future for near term cash flow. It might work out great if Eddie Lampert is indeed able to reinvest that cash effectively (as he has in the past), but I'd be worried that if he's trying to build the next Berkshire Hathaway he's doing it on a fairly weak foundation and will soon have to have some great performance from other investments if they're not able to grow the Sears business (not unlike the way Buffett had to shed the weak textile business that got him started). It's admirable that he's focusing more on profitability than on sales growth, but that can only work for so long. Great turnaround so far, shaky future in my opinion.