texual

I guess I think its funny we never mentioned GoodHaven as another reason to own SHLD. They are incredibly smart and completely in-depth investors who have worked at Fairholme. They've gone out on their own and still kept a big position in a company like SHLD. Says a lot about the investor base.

That was so awesome!

Brooklyn, New York.

Double digit cash. Haven't added any new stocks in over two years. Added a few positions but over a year ago, not likely going to find any ideas for a long, long time to come. This may be a quiet decade for me...

I still prefer Fairholme, no matter how much these guys took a lot of Fairholme's style to their new fund, some of the investments just don't appeal to me like HPQ and the Gold miner... but hey they'll do just fine with their long term strategy. But they'll never be as cool as Fairholme!

I have not purchased any stock besides Microsoft this past year and a half. If I had any desire to average UP, I would buy a lot more MSFT. However I really like the gains and feel like buying here isn't going to work in my favor! MSFT was a good investment in the mid/high 20's and I look forward to the dividend increases. I treat it like BRK.B, its a money market account that just happens to kick ass :)

Easy boys. Its Friday!

We are a dying breed and part of me likes that we have a club and the club is awfully smart and that's all that makes a market. Good work on this community being focused on a single principle of value investing.

After I get my original investment back from dividend payments I'd consider selling because I'd have free shares to use for investments outside the core holdings

Cashed out today, good overall investment. Too bad it took about 3 years till they got bought out. At least there was a dividend through the period.

Does anyone see that down the road him and ESL would team up and run a investment vehicle together?

Anyone have an idea where the 2nd half of this talk is? Someone out there should post a link to it, or ask the university for the remainder.

The GS preferred were a better investment and I think that Buffett predicted the equity would be a shaky investment for some time. Meanwhile he pockets a huge return and makes out like a bandit. Perhaps the next few years for BAC would be flat to down. Who knows. Buffett also owns some stocks like USG which have been small, volatile positions. I wish he bought BAC common but I am not inside his mind on all his investments. Personally I looked at the IBM investment as a conduit to buying MSFT. He loves Microsoft but said he would never buy it due to his relationship with Gates/board crossover. I think he even said he would buy MSFT and it was dirt cheap. So he buys IBM and I buy MSFT. Don't copy Buffett on everything, but infer what he is trying to accomplish and invest according to your own reasoning.

Long equity from last year at 11, continued buying every few months down to 5 and now just sitting on it. No changes to the position however if it goes back down another dollar I would be interested in averaging down. No options, warrants, just strictly common. Hoping for a major dividend payout over the next few months and hopefully a big buyback.

At one point Charlie asks him what the current PE ratio of Microsoft is. If you are writing an article with such a bold premise you had better damn well get financial metrics memorized. I can't imagine how he didn't spit out ~10 when he got asked that question. He says he doesn't remember off the top of his head. That signals he just doesn't know enough. He also claims they don't have much cash. He says people are not buying windows 7. I don't know where they dig these fossils up but its getting really sad. I also found his explanation for their performance reviews pathetic. So a third rate journalist is a genius next to gladwell in his worldview, I guess. Look in capitalism there is ranking, and value ascribed to people. Sometimes there has to be artificial cutoffs and metrics we use to judge performance. He makes Microsoft seem like a demonic enterprise. He might even be shocked that Steve Jobs used to bring his 'top 100' employees to a yearly retreat to get things out of the best and hide it from the remainder until the products were finished. How crazy to assume one guy can know who the top 100 are without some kind of scale system similar to other corporations. I just don't see how that can be worth writing about negatively. Competition is good, man. I guess that's why Vanity Fair writes these kinds of articles: all shock and glitter with no cigar. After reading some replies to that article I believe the author views the company with the same kind of indifference as the average consumer who isn't really following any technology news. So they are likely saying Apple is cool and Microsoft is not. I get that, but that isn't anything special or new. That doesn't mean they lost a decade. Theres nothing savvy about that article. I've seen better posts on seeking alpha. I'd be making a crystal ball assumption but MSFT looks like a great investment here after realizing how many people see the company with bad lenses. Even Vanity fair can't grasp it. I'm adding shares every chance I get.

Had to stop this a few times to take a breather. This guy literally knows nothing about Microsoft. At one point he says 'windows 7 is great, people who buy it love it... but its not selling.' and I just stopped watching. I wonder why I can't pen pieces in vanity fair about any topic I wish, even if I don't know the basic facts. Please refer to the financial metrics posted in the last few days on the Microsoft thread, and their past 10 year history to really understand how this 'lost decade' came to be.

Now in the final 5.

The latest Charlie Rose episode is posted on charlierose.com. It is with Bill Gates. He speaks a lot about philanthropy as well as technology. The Surface is discussed as well as Microsoft and the competition.

"Sears remains a large position in all our funds, notwithstanding announcements in late December of falling sales and margins, rising expenses, and write-downs. Investors fled with this New Year's greeting before Chairman Lampert purchased over $150 million of common for his personal account. For many reasons, including management, we continue to believe the assets of this iconic brand to be a multiple of values implied by its current stock market price and continue to see the beginning of a new Berkshire hathaway." - Bruce Berkowitz, 2011 end of year letter to shareholders of Fairholme

Roll back the tape to the years 1965-1985. You'll find the answers if you dig around in those filings and letters. It might feel like Waterloo for now, though.

The market cap is too low, and the repurchases can go a long way. I assume they are buying back as much stock as they can legally, but I've been saying that for a few years, as they slowed down. Is this the moment that everything goes Fairholme/ESL's way or do they get proven wrong and lose everything? I've got no idea, time will tell. I'd like to know how Berkowitz feels about SHLD now. He doesn't talk about SHLD much and uses two examples: BRKA and AAPL as comparisons. Can he use those today? He could get more active or join the board. Fairholme may help with a cash infusion (Bruce mentioned that once, when talking about SHLD and how AAPL almost went bust had it not been for a richer, lending hand with MSFT) and I sense that may happen at SHLD to some extent. Both of these men depend on the success of SHLD. I think Berkowitz said that if the retail op comes around its a grand slam home run. What if the retail crumbles fast? Is that also not going to influence credit ratings? What about customers who see Sears in the news for doing horribly? What happens if SHLD just gets really bad, like -10% next year in same store sales, who knows. He cannot shut down 500 stores without the entire thing crumbling. Customers stop shopping at places going out of business, employees get wind of layoffs and are less motivated to do this company any favors. Monish said the employees got in the way of value investors and ESL, and he sold his stake. I think this was a few years ago and is now even more true. I don't see how you can shut down this size operation and suggest its like the Berkshire mill's. Sears as a retailer to me is finished. Question: Berkowitz likes to talk about how ESL just repurchases all the shares until there are two left, one for ESL and one for Fairholme. Does anyone understand what that actually means? What does that imply about the market value and price of shares? Who will buy them when the company is not valued by the market? So just say Fairholme owns 20m shares and ESL owns 70m and the rest are repurchased, what next?

That's okay too. It's not an easy job. I'd be very apprehensive about someone who thought this was. Its only going to be awesome if theres a turnaround here. And I'm not talking about the retail stores making a consumer comeback. Not happening, ever. I want this firm to be as tech focused as amazon, and sell their own proprietary brands (craftsman/lands end/kenmore - just like amazon has the kindle). They could either keep growing in that direction or spend it otherwise to diversify. Just don't put money into the stores. Thats a losing strategy - ESL is not stupid, no matter what the stock price suggests. Lou at Sears has a background in technology and IT. I think we could argue that Jeff Bezos knows nothing about retailing either. It's not the same environment, he has an eye for where the ball is going. Its going online whether people want to admit that or not. Its a market that grows. Big box will remain key, and just like DVD with Netflix, eventually becomes a no growth to negative trend. Replaced by streaming. I'm sure plenty of people still use the DVDs and believe its going to be around for many years. They are both right and wrong. The growth comes from streaming. Supporting DVD isnt a good long term choice. Supporting the Sears big box format is unwise for the long term. Growing your online capabilities is smart. They just happen at different rates and its very hard to predict when and where there will be a divergence. Look at what happened at Netflix this year alone. I still think the ceo is smart as a whip. He just can't time it. I read this year DVD sales fell by 9%. Is Reed hastings brilliant or stupid? I think time will tell. -I will note that I have been very wrong about this company and my performance in investments have gone very badly because of it. I've reduced my position by half and will revisit SHLD after the annual meeting and letter are available for me to consider.