prevalou

Why make Kmart disappear ? Kmart locations earn money (unlike Sears with all their brands)

What is unclear to me: do you think Lampert will close or sell all big format stores in a couple of years (run off) to invest in new format stores or just reposition some of them (close the less profitable, keep the other and invest in new more specialized stores) ? I just don't believe in the first option as a strategy: too painful and demotivating for remaining employees, big risks for the brands (how much of the brand sales that go through big format stores could be replaced by sales through other retailers ?)

I don't see run off as a credible option 1) it would put a lot of real estate on the market (at the wrong time) 2) the value of the different brands would diminish due to massive market share loss (kenmore for instance) with stores reduction. 3) if the run off process lasts, remaining staff would be demotivated waiting for his turn to be fired. The same store sales would then nosedive and accelerate the run off process. With 300 000 employees, you have to send positive messages to motivate them. I think it is the dilemna for Lampert: how to shrink reasonnably without sending the run off message.

He refers to sequel versions of" security analysis. The old version from 1934 is pur Graham

I agree with taxlaw. Moreover after reading chairman's letters, I don't see a will from Lampert to liquidate the business. In 2006, after Sears merger, Lampert talked about a new start up consisting in Sears +Kmart. In 2010, there was a net addition in the number of stores for instance. It is not a foregone conclusion that hedge fund people can't manage retailers (Bezos was a hedge fund guy too)

concerning Circuit City bankruptcy , I wonder if it can be assimilated with Sears. Circuit City inventory was not very diversified (electronics) and subject to a rapid obsolescence. So It was normal suppliers demanded cash upfront. Sears inventory is diverse and in the aggregate more stable.

a lot of critics point now to underinvestment in Sears and Kmart stores and it is their explanation about the poor same store sales. What about Macy's ? capital expenditures more than halved since 2006 (3$ per sf now) but its sales are improving. Nobody seems to care here about dwindling capital expenditures. Maybe there are other explanations. Electronics and appliances are a big portion of sales at Sears, a small portion at Macy's. Electronic brick& mortar seems to be in secular decline. Bad merchandizing is a possible explanation, too

The question for me is why this anouncement at this time of the year (low volumes) with a presentation giving a maximum of bad news ? - ebitda less than half last year (it can be a lot less, we don't know, just can imagine the worst) -revolving credit facility used ( precision: last year it was not) -no shares repurchases (generally sears repurchases shares even at higher prices) - net inventory liquidation will bring 140 to 170 m$ (we don't know what real estate Will -no mention of sears Canada ( we can imagine the worst given last quarter) Is it innocent? Just disclosure as soon as Sears is informed? ( last year preanoucement was In january)?Does Esl want to take the loss In 2011? Or is there other explanations ?

What does it mean: "Close 100 to 120 Kmart and Sears Full-line stores. We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate." What are these 140 to 170 m$: the proceed from inventory liquidation, or the profit from inventory liquidation? Or the net proceed from inventory liquidation (inventory less payables and debt from the stores). Does someone have an idea? Moreover There is real estate from the closed stores. How to value it ?

Do you know if it is five years lockup and then five more years lockup or if it is five years lockup and then you are free to sell when you want?

Sears top at 160+ was in 2006/2007, five years ago...

A lot of people seem to disagree with Lampert strategy and his implication with sears. It reminds me Berkowitz and St Joe with a larger scale. This could be a motive for redemptions In the future, even if he bought the shares at 5$ 7 years ago. The problem: will investors In Esl continue to follow Lampert if the street always disagree with him and if he has a bad year ( like Berkowitz). Then the risk is a forced sears sale by Lampert himself.

Annoter question: what happens if There are big redemptions on ESL, due to poor performance for instance. I suppose investors in the fund are locked, but for how long ? In case of redemptions, would Lampert be forced to sell a portion of his sears shares ?

Does someone have an idea about Orchard value? I suppose shld quotes nos ex Orchard.

What happens to the put and call In case of superdividend ? In case of spin off?

no property tax in Australia ? http://en.wikipedia.org/wiki/Property_tax#Australia

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDQxMjcyfENoaWxkSUQ9NDYzMzA1fFR5cGU9MQ==&t=1 Genworth opinion on australian real estate market

Well said. Hopefully the contagion Will not spread to us banking system via unintended consequences.

That is good but to pass the test, us banks Will probably cut further their european exposure which will continue the run on european banks and the risk of global recession

Moreover the 50b$ reserve includes 35b$ loan provision. Is the 16 b$ reserve for litigations enough to cover 800 b$ originations (bac third quarter earning) , i have no idea.

I don't think 200b$ shareholders equity is relevant: There are 85B$ goodwill and intangibles and 18B$ preferred stock . Common tangible is more 125B$ To write 200 B$ In a presentation is misleading, from a common stock poit of view. From a preferred perspective, There is a margin of safety: 125B$+50b$ reserves=175b$ seems enough to cover litigations and credit losses in a worst case scenario. From a common perspective, i don't think it to be obvious except maybe if you have insight about the maximum losses on litigations or at least some reasonning about them. I don't see any In this presentation.

It looks more like an ad for Bank of America than an analysis. for instance, what is the potentiel cost of litigations In a worst case scenario? How could it impact dilution?

https://twitter.com/munilass/status/125579671596314625 Very interesting analysis to understand Harrisburg and to avoid generalization about municipals

Harrisburg is old story but chapter 9 is not a done deal https://twitter.com/munilass/status/124175096125456384

https://self-evident.org/?p=931