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Lampert's Patience Is Rewarded as Sears Holdings Buys More Sears Canada Shares

Todd

30K shares * $18 per share is less than $600,000.

This is an immaterial move. *Beautiful*

Can you please get your nose out of Lampert's a**?

Railroads Are Getting Cheaper (vs. Gold and Silver, at Any Rate)

Go to Apmex. They buy silver AT SPOT and sell it ABOVE SPOT.

www.apmex.com/APMEXTop...

(Buy price column, sell price column).

Railroads Are Getting Cheaper (vs. Gold and Silver, at Any Rate)

I disagree with one aspect of your comment (copied and pasted below). The spot is the spot, anywhere in the world, for anyone. I think what is happening is these dealers, even Apmex, are taking advantage of buyers. For example at Apmex THEY buy silver for $13.60 and turn around and sell it for $15.7. How can they do that? They are taking 15%...not a bad business to be in, probably. They are taking a page from the brokerage houses and Wall Street. Adding shipping that is close to 20% sucked up of potential returns just because of transactional costs...this is quite bad.

"I agree; getting physical metal in your hand carries quite a premium. Those who follow the market know the 'real' and 'paper' metal prices have been bifurcating for months now. I wrote an article about it months ago in October..."

Berkshire: Little Downside Left at Current Levels

how's sears doing

Railroads Are Getting Cheaper (vs. Gold and Silver, at Any Rate)

The other thing I was wondering:

You say "real estate" is attractively priced at 500-1000 ounces of silver. What sort of real estate are you referring to, say a house that currently costs $400,000 around the suburbs of New York, or what? I didn't read ther real estate article but "real estate" is not very descriptive.

The second thing is, this website: www.zealllc.com/2008/c..., the third chart from the top, gives the nominal and real prices of silver from 1970 to 2006. The prices in today's dollars are in blue, and the author notes 7 silver price "peaks": $30, 130, 60, 31, 19, 10, and 15. Absent some extraordinary years in the 1970's, silver has rarely traded at or even twice as much as its current price. What are your thoughts on this. I have heard the inflation argument, but purely based on supply and demand where do you think silver stands, and what numbers/facts/data do you use as the basis for this?

Last are you at all concerned about the metals' liquidity - ie will there always be someone to buy that silver bullion or whatever form it is in which you hold your metals.

I checked out those sites, thanks for that, unfortunately they do take a nice hefty premium to spot since ie 10 oz of silver they want around $160 after including the price of shipping. But it's something to consider anyway.

Thanks either way.

Railroads Are Getting Cheaper (vs. Gold and Silver, at Any Rate)

I don't know if this is on your website, but

How do you recommend buying commodities, especially the metals?

I don't trust the ETF/N's, I was thinking Ebay might be good for example where there are people selling 10 oz of silver bullion for around $155.

What sources do you trust for quality and also a price close to the spot price (not big premium in excess of spot)?

Railroads Are Getting Cheaper (vs. Gold and Silver, at Any Rate)

To Trace:

I've been thinking about this and would appreciate your opinion:

How does one know what the intrinsic value of an ounce (or whatever mass) of gold is? Isn't gold just as prone to a bubble as any other asset?

For example, say gold goes to $2,000 an ounce. How does one know whether that is the proper price for the metal, or whether it is the result of lots of money pushing up the price? If asset inflation that pushes prices past reality (i.e. real estate, stocks), why can't this happen to gold or metals as well?

I mean, two hundred years ago, or whatever, tulips were considered a good store of value for a short period of time. That's an extreme example, but still.

Seven Irrational Retail Valuations

I think I see your point of view, but I think that those economists are very, very wrong. I agree with Peter Schiff, for example, that there are serious, deep-rooted problems in the American economy, and that what we are seeing now are the early manifestations of these problems.

The economists think that all that needs to be done is to have credit flowing again. Well America and Americans are essentially broke - much of the spending that we've seen the last 3-4 years has been the result of massive asset (i.e. realty) price inflation. Americans then took out home equity lines of credit and spent that too. They took out money from credit card companies and spent that too.

OK so even if credit is not flowing now, and credit starts to flow, this will result in more of the same that got us into this mess. Any relief in the retailers will be short lived at best.

I guess that you are trying to say that these retailers are the exception to the overwhelming rule of struggling retailers, but WHY? How is Abercrombie's business, or Gap's business really all that different from, say, Talbots, or whatever? It's not, in my view. And just because their earnings have held up so far does not at all somehow guarantee that they will continue to hold up. Things could just get worse...and worse...and worse, and not you or any economist out there can tell me otherwise. Obviously I hope that doesn't happen because I live in this country and I want to have a good job and so on, but when it comes to investments or whatever that's something to consider.

No, I do not think there are really any safe paper assets at the moment. With the Fed and US government doing their darndest to dilute the value of the dollar, there is a real wipe out risk with any paper assets.

BTW I think there are some bonds that look halfway decent - for example Sears Holdings has bonds with a 24% or so YTM coming due I think 2011 or 2013. I mean there is a risk of bankruptcy but at least I suppose there you're getting cash instead of these phony buybacks that management does so their f*cking call options will go in the money.

But I haven't bought those bonds because I just don't have the money, also like I said there's a risk of bankruptcy there too and that debt is unsecured.

Seven Irrational Retail Valuations

"The market is unfairly punishing retailers"- Do you know how many retailers have gone bankrupt in the last year? This will continue and get worse.

You think there will be no growth-I think there will negative growth in earnings. I think we are now seeing the tip of the iceberg - we do not yet see the full effects of this recession in these retailers' earnings, but we will.

Basically my view is that your assumptions are misguided.

Also I think an 8-12% earnings yield (even a realistically stable one) is nothing to jump up and down about considering that inflation in the US is around 8-10% per year and maybe even higher in the future. You can thank Mr. Obama and the Fed for that.

Seven Irrational Retail Valuations

I think that you are wrong, dead wrong.

These companies ARE all fundamentally changed by this - and what we have going on is not a mere recession.

Don't imply that Mr. Market an idiot. Mr. Market burned a lot of people over the last 7 years.

The retailing business in the United States has fundamentally changed. Times will be tougher than in the past. People will not make credit-fueled purchases of $80 T-shirts made in China anymore. Throw the old P/E's out the window because they have no relevance anymore.

Analysts Ecstatic Over Baytex Energy

My problem with Baytex has always been that its enterprise value to reserves ratio is higher than most other oil cos.

eBay: Stock Fully Valued at Current Price

What are the numbers that you use in your sum of the parts valuation-are those EBITDA, EBIT, Operating Income, Net Income? What are you using?

Notes from Steak 'n Shake's Investor Day

I still think that there are just too many question marks.

Yes the real estate may be there but the point is that proceeds from its sale make this at most - at most- a wash.

As for the operating business:

There is another company with a great brand, you could say a long and storied history, selling at a market cap to sales of 1:3, in the casual restaurant industry: it's called Krispy Kreme donuts. I'm sure that after about 15 seconds another 5-10 names would pop up that fit this description.

I just don't think that is an automatic homerun, not even close. If additional facts come to light perhaps, but my final word is that this could very well be a dead company by now. Even if it survives, etc., it will not necessarily be great for investors. Restaurants in general usually just don't have great economics for shareholders.

As for Biglari's capital allocation abilities, there's really not much he can do with a bad business, if this is a bad business. What's he going to do, buy more restaurants?

If you strip away the PR I think that there's much less here than a lot of people think.

Notes from Steak 'n Shake's Investor Day

correction at to #3: I meant to say that the stock is not trading below its (best case, for reasons above) "liquidation value", rather it's trading about equal to it

Notes from Steak 'n Shake's Investor Day

For a guy that knows next to nothing about this company (me) I seem to have started a lively discourse. However I would like to point out some inconsistencies in your post.

1) You ignored that I said the $1.5M per property was a best case (read: unrealistic, in my eyes) scenario because it excluded costs and taxes, and also because it's not at all clear what the value of the properties is.

2) You didn't reply to my question about how much they received for the properties that they did sell.

3) Assuming this (very optimistic, for reasons stated above) liquidation value, the stock is trading around (not above) its liquidation value. And I did not include the $30M of debt or $80M of current liabilities. The company has $60M of current assets, but I don't think they'll get book value for those (I think they'd get less in a liquidation).

4) Even if they can liquidate at the current market cap, where in the world is there any evidence that the leased businesses are profitable at all? Some subset of them may (and I emphasize MAY) be profitable, but (i) if management is so shareholder-friendly, why didn't they disclose which of the restaurants are profitable, and how much profit they're making). My point is, that as a group the leased stores might not be profitable at all. Lets say 10 of the stores are profitable - so they might make $1M a year collectively, or $5M a year collectively, who knows? Not me.

5) Please don't mention this nonsense about how the chain was started during the Great Depression. That is just propaganda from management. Numbers only, please, corroborated by facts. Leave the propaganda at the annual meeting, thank you.