Parsad

Yes, a trap for shareholders, but not noteholders who are getting a pretty penny in interest. In fact, in a couple of years, Fairfax would have recouped their cost from interest alone. If LVTL defaults, then they get a chuck of that $10-12B fibre pipeline. So yes, equity holders...value trap...bond holders...good investment. Cheers!

They've spent $1.6B over the last three years on capex, so if he's not pouring it into the stores, where is it going? Sears Canada was better off than Sears USA, but it is going to run up against stiff competiton for the forseeable future. Buying Sears Canada may prove to be a poor decision, when that cash could have been invested elsewhere. Instead, they're burning through the cash in Sears Canada too! Revenues keep dropping, shareholder equity keeps dropping, debt has increased dramatically...slow burn! My opinion remains: Pour money into investment ideas or other businesses; runoff the underperforming stores; sell off properties in bulk as values stabilize or start to increase; license core brands to other retailers (Craftsmen, Kenmore, etc); eliminate paper catalog business and move everything online; decrease store footprint and reduce number of inventory items; reduce operating expenses to the bone. Cheers!

Hi Zarley, I also had the same feelings with Sears for many years (owned it briefly a couple of years ago, but replaced it with SHLD debt in 2008). The cash flows have been robust. The brands have some value, as does all of the real estate. If the credit crunch happened a couple of years later, and Eddie had been able to liquidate some of the property before the crash, then it might have been a different story. Instead, they've poured a couple of billion into share buybacks and revamping the stores. It hasn't worked. They still could salvage the whole thing by reallocating cash flows and selling off assets over time, but they haven't indicated that they plan on doing that. So far, they think the department store business can be restored. I have a hard time believing that. Cheers!

Totally true. But madness is doing the same thing over and over, and believing you will get different results. Eddie hasn't done anything different yet. Buffett did something totally different by reallocating the cash flows, as did Steve Jobs when he came back to Apple. Would the old Jobs have taken a cash infusion from Bill Gates? Nope! This one did. If Eddie wants to save Sears, he has to do something completely different. What he has been doing has done nothing to save the value of the company...and that's because the model as is will not be competitive. He should not pour another dime into the business other than the bare minimum necessary. Cheers!

For sure. I posted this in the SHLD thread a month or two ago, but my thought is for him to liquidate the retail stores and use the cash to build a portfolio of brands (to go along with their brands such as DieHard, Kenmore, Craftsman) and work on distributing theme through other retailers. They unfortunately own some bad brands to go along with the better ones. I was born 1969 and my brother was born 1981. I shop at Sears, and it's actually the first place I head to when I need a new appliance because of the Kenmore brand. But my brother does not really shop at Sears because of the brand at all, and he's unlikely to shop there unless I tell him to go there. And Sears Canada does a better job than Sears USA when advertising, promoting and reinforcing their brand here. I can only imagine how tough it is for Sears in the U.S. Target is only coming here now and Wal-mart had strict restrictions against them in various municipalities for many years. That is changing. Sears Canada is going to face the same competition that Sears USA has had to face. The generations after me have no inclination to shop at Sears. I still get all of their catalogues every year, but I know of hardly anyone else who still does. Either they revamp the model completely...which hasn't worked in several attempts...or they dis-assemble the pieces, reinvest the cash, and keep the core business in a scaled down model. They have to do something, because nothing else is remotely working! Cheers!

Value Trap? Sears Holding! Unless Eddie can liquidate some of the commercial land and other assets (Craftsmen), this one is a trap. Their department store business is dying. While it generates free cash flow, it is in a slow, deteriorating drop with it's core customers slowly disappearing...those born before 1970. Those born after aren't buying there anymore. Their catalog business has too much to compete with online. It's a cigar butt and has been for the last few years. But the last puff is one really long painful one! If he can take the cash flows and invest elsewhere, great! But so far he's overpaid for stock buybacks, and spent the rest keeping this sucker afloat. Buyer beware! Cheers!

Hi Folks, Paul and his team will be migrating the site over to their server in the dead of night on Saturday. The transition should be virtually seamless, and you should see a significant improvment in speed and lag once completed. Cheers!

I think Sam Mitchell said it best a couple of years ago at our AGM: "You just can't ignore the macro in some cases!" So my take is you pay attention to what is happening, but in general you stick to the fundamentals of Graham and Buffett...buy cheap, sell dear. If you start to see things that are unique in the macroeconomic environment, where the consequences could be dramatic, you price that into your margin of safety. That's really all you can do, since none of us can see the future and hindsight is always 20/20. Cheers!

I think older generations have more of an attachment...either culturally or historically-based. They held it for different reasons. 70 years ago, people thought the Nazi's and Japanese were going to take over North America. 50 years ago, they thought the Soviets were going to take over North America. 10 years ago, they thought Al Qaeda would detonate a nuclear bomb in North America. All of those things were possibilities but never came to fruition. Today they think that the U.S. will go bankrupt and the European union will dissolve. Both are possibilities, but I'm not sure either will come to fruition. Certainly not the former, and the latter is more likely to be the removal of a couple of countries in the worst case scenario and the addition of others. The Euro will exist, but just not in the form we've necessarily known. I'm not a fan of gold in the slightest. Buffett said that all the gold in the world ever found amounts to a cube 65ft by 65ft by 65ft. It would be worth $7T! But for that same amount of money, you could buy ALL of the farmland in the U.S., 23 Exxon Mobiles and still have a trillion dollars left to do with what you want. Which is the smarter investment? I owned gold in my safety deposit box about 7 years ago when it was $300 oz. I sold a long time ago at $700-800 oz on average. That'a all I think gold is worth right now based on supply and demand from utilization in industry and normal jewellry demand. The rest is speculation and fear! So I would not be surprised to see a 50% correction in gold at some point. I have no way to really value it outside of that supply and demand. And I don't invest in things based on what other people may be willing to pay. So I will not touch it, and I warn everybody I know that they should be careful. I have looked stupid for a couple of years, and more and more people (family members in particular) are reminding me how wrong I have been...so I think we are getting pretty close to the top. Then again, I thought rap music was a fad, so you may be seeking advice from a fool! ;D Cheers!

Good stuff Berkshiremystery! Cheers!

Sanj, I can't place where I read it, but I thought I read somewhere that insider buying tends to go up at exactly the wrong time (i.e. when the market is overvalued). In 1998 (the last time insider buying was this high), the PE10 was in the 30s. There are a million articles and PhD papers on this...some saying no, some saying yes. Common sense tells me that when executives buy their own stock, they believe they are making a good investment based on inside information and the company's particular circumstances. If people are naturally selfish, this would seem to be a good indicator...but it's not the end all, be all. Cheers!

These types of bubbles correct quickly when they do eventually correct. I'm getting concerned...but then I've been concerned for two years! ;D Cheers!

I'm seeing more and more signs that things are getting better, not worse! Cheers! http://www.cnbc.com/id/44156203

I've let this thing go, because there really are no certifiable facts either way! It's not a business I would go long or short on, as there are easier ways to make money. From what I've read of Block's report, which wasn't very good to begin with, I'm not convinced. At the same time, TRE's management seems incompetent, and there certainly does seem to be gaps in their ability to find information about their own business. If you need something from me urgently, I will find it for you personally, so why the heck is it taking so long? Personally, I think both are idiots...Block and TRE management...so the truth may very well be somewhere in the middle. Hope Block loses his shirt and Chandler bounces TRE's management. Until then, everyone be nice to each other until you have verifiable information to gloat either way. ;D Cheers!

I suspect they'll have a William Ashley booth so shareholders can see the product and get more information. The number of booths have increased dramatically in the last couple of years, and I can't see them getting less anytime soon! Hopefully, we see another couple of acquisitions this year. Cheers!

Yup, any family wedding, etc, is now going to get William Ashley china! Cheers!

Fairfax bought Williams Ashley China, a family business. Yeahah! Cheers! http://www.fairfax.ca/news/press-releases/press-release-details/2011/Fairfax-Announces-Acquisition-of-William-Ashley1126350/default.aspx

Not only does this bode well from the obvious perspective, but generally if insiders are buying the stock, they will use company assets to also buy back stock. Cheers! http://www.cnbc.com/id/44161947

I'm really going to miss the old guy the day he's gone. Another great interview, and after all these years, I'm still in awe of the man's humility. Cheers!

New additions to Baupost. Cheers! http://www.thestreet.com/story/11220291/1/conservative-hedge-fund-buys-microsoft-bp.html

I would agree with that totally. By the way, Allan has the best investment record I have seen for any fund manager in the last five years, so that should tell you something. And he doesn't spit out bravado or shots at others either. He's got the discipline and the right character which makes all the difference in the world. Cheers!

Francis was adding alot of BAC & JPM warrants, added to Compucredit, bought GS and added SHLD. Cheers! http://www.sec.gov/Archives/edgar/data/1389402/000114420411047418/v232298_13f.txt

A few changes: Decreased ATSG, increased BRK-B, added Brookfield Residential, doubled GS, added HNR, sold ICO, doubled WFC warrants. Cheers! http://www.sec.gov/Archives/edgar/data/1173334/000095012311077493/c65867e13fvhr.txt

Not much happend. 3rd Q will be more interesting. Although, they did quadruple their stake in RIMM! Cheers! http://www.sec.gov/Archives/edgar/data/915191/000095012311077615/o72955ae13fvhr.txt

Yes, the butterflies and excitement...yup! One piece of advice...enjoy the process, don't kill yourself, don't be too hard on yourself and stick to your principles. It's a marathon, not a sprint. Cheers and congratulations!