texual

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.