valueinvestor82

How many more of these sales does Sears have in them? More than anyone gives them credit for. SRG validated, not contradicted, the composition and value of the remaining portfolio of real estate. I've never seen situations as one-sided as AMZN on the bull side or SHLD on the bear side.

Comparing a value investor to an index with the market being at an all-time high doesn't have much meaning, in my view. That approach is probably what has pushed more people into indexing to begin with. Let's perform that comparison after a correction..it's avoiding catastrophic losses that makes the difference, not sticking around for the incremental last few points of a bull market. Just a sidenote!

That's a huge concentration as a percentage of the amount shown as the portfolio total.

Company sells property for $72.5 million, stock immediately wipes out $72 million of value. The absurdity is as follows- so SHLD sells another 10 properties for the same price tag. The stock declines to zero (current market cap adjusted for the cash received from the sale), then how does this "efficient" market punish SHLD? The first stock to go negative? I saw the same thing happen with OCN, it went to $1.50 because the analysts spreadsheets showed OCN losing a temporary amount of losses into perpetuity. Until they demonstrated the turning point, and then in a few months the stock went to $6. The market can't discount the assets forever, and Eddie can't burn the same cash forever, so someone will be proven right or wrong, and I hope it's sooner than later.

That's cute, Oreo. So $1.7 billion FCF is roughly a 20% yield on the current market cap. I see you've said positive things about AMZN, trading at 50x trailing 12 mo FCF. TELL ME MORE.

I used the word "wisely" to describe selling near the top for each spinoff (and I participated in SRG at $29.54 or whatever the participation price was, recently selling in the $53 range), but I should have said "luckily." My usual problem is selling too early, but when few potential negatives seem to be priced in and a substantial shorter term rally occurs, I have a hard time hanging on, unless my believed range of NAV is still a long ways off. I actually did sell SHOS quite a ways off from the astronomical high, but it was multiples of its current price. So I didn't sell because of some technical indicator, I got lucky. I don't have uncanny trading abilities, I was just making the point that I don't know any shareholders who actually kept every separated asset "speculating" that their futures would become brighter.

Scott, I sense sarcasm, but make sure when you say such things that you consider the value of each spinoff and right distributed over the last few years. And no, you can't automatically assign zero value to Orchard or $6 to OSH, many of us wisely sold at or close to the peaks of LE/OSH/Orchard and maximized use (or disposal) of the rights. I've owned SHLD 3x in 4 years and made a substantial return each time. Maybe if you buy, hold, and forget about it, a negative assessment may be more understandable.

You missed nothing, Picasso. I misstated my point based on a compilation of items I read today, including an SA article on the point. I edited my post to correct my mistakes :) thanks (inadvertently) for pointing that out to me. I'll blame it on being a long Monday. Regardless, my belief is that the credit markets are correct in valuing the bonds at $85 and I trust Berkowitz' homework on individual property values. He has a record since his funds inception that many envy, and it appears he's no Bill Miller.

Because despite the bonds trading around $85 and all of the aforementioned facts regarding insider ownership, shares are shorted over 100% of the effective float, and everyone else (like the posters on this message board) have already sold, taking victory laps to stroke their egos about how the decline is rational and they knew that it would decline. Look at JCP, same basic story. I made a killing on JCP (sold at $11, but recently repurchased) and this seems even more clear-cut. I see 2009 property values being quoted and then I ask myself, have they looked at values 7 years later? Do bears watch Warren Buffetts moves in SRG, which practically require an orderly, lengthy transition of SHLD out of its real estate? Even though he's a crony capitalist, he's smart, and his actions show that the Seritage deal undervalued the real estate. Berkowitz said the remaining properties substantially mirror the property values of SRG, but the market has assumed it's all over. Buffett's views toward SRG point toward the bear case as severely overstating the bankruptcy case. But like I said, credit markets valuing the bonds at $85 be damned, it's time to evaluate the bankruptcy scenario! Sarcasm emphasized.

What? -30% comps finally made them chase another idea to restart the growth story meme? I still can't believe it's trading at such a ridiculous multiple of earnings.

Back to reality- so once this bubble gets a bit deflated (let's say- AMZN at $300) will Bezos issue twice as many shares to make sure employees are payed the same salaries? Just wondering...

Good points, Beer! I (as a shareholder) am glad that they didn't buy back a huge amount of stock. Not that they predicted the decline last week, but the result of avoiding buying back stock (ok they did buy back $10 million when operating income was mid $20 million last quarter) means that we can now use cash to retire a huge amount of stock for the same funds used. None of us know if they bought since last week. We saw one small insider buy. Given that apparently analysts are plugging into their spreadsheets a perpetual loss and permanent government monitors ($170 million of extra annual expenses), perhaps the monitors finally leaving will be the biggest catalyst at this point. I know it's not totally accurate, but if you back out the temp cost of monitors, I show that they basically break even at the current revenue run rate. I don't see why the market obliterated the stock.

I for one believe that Berkowitz is accurate on the value of SHLD. Even if he's off by 20-30%, SHLD burning $1-$2 billion a year would take many years before today's price is "fair." And hit piece articles telling us what we already know about women's shopping preferences add no value to the discussion.

Peridot, what qualifies your ability to analyze real estate asset values better than the throng of experts that Berkowitz hired? Pardon me if I trust an immensely successful long-term value investor like Bruce over your word that you looked at each property...

Don't forget the re-upping of the buyback. $125 million is a huge portion of the market cap