Tuesday, December 27, 2011

Sears: The Joke that Keeps on Giving

December 27, 2011
Sears closing more stores as holiday sales slide

(Reuters) - Sears Holdings Corp will close as many as 120 of its Kmart and Sears discount and department stores after its holiday sales slumped, sending its shares sliding more than 27 percent to their lowest level in three years.

May 8, 2008
Our Pillars of Retail Strength

What's a CEO to do these days if he can't report financial information and he can't hide financial information? That's sure some conundrum!

In the comments, Anonymous felt that we were joking. I can understand the confusion. We often joke in the comments.

I can't believe the previous comments are supposed to be taken seriously. First off, Eddie Lampert was recognized as a whiz a decade before buying Kmart. Second of Lampert is still a whiz his return on Kmart and on Sears even with the recent decline beats the market hand over fist.

Either you guys are joking or you like to buy high and sell low. Not my style. Lampert and Sears will prove to be fantastic investments over the next 10 years. Over the next 10 minutes? who knows and who cares? - Anonymous

SHLD price on May 8, 2008: 93.45
SHLD price on December 27, 2011: 33.38

Net Gain/Loss: 64% loss

In all fairness, there's still 6 1/2 years to go on that fantastic investment. If it triples from here, then hindsight will will show that it was every bit as good as buried cash. Woohoo!

Special thanks to Credit Bubble Stocks for posting about Sears today. I would have missed today's 27% decline without it.

Source Data:
Yahoo: SHLD Historical Prices


Stagflationary Mark said...

A guy walks into a bar. The bartender says, "Do you want to play a game? See those two rib-eyes nailed to the ceiling? You get to throw one dart. If you hit one, you get to take them home and I'll give you a free drink." The man says, "No thanks, the steaks are too high."

A man runs into a bar and asks the barkeep, "Give me ten shots of your best whisky." The bartender sets up the ten glasses. The man starts drinking them as quickly as the bartender serves them. The bartender asks, "Why are you drinking so fast?" "You'd drink fast too, if you had what I have." The bartender asks, "What do you have?" "Seventy cents."

Just wanted to make sure that there's some joking in the comments today. ;)

Dr Morbius apparently knows them all!

Fritz_O said...

I'm working from memory here but IIRC the Kmart/Sears deal went down in 2005.

At the time I though it was about the land under the Sears stores, not about the stores themselves.

I thought of Lamburnt as a really wealthy/leveraged flipper who, like legions of others, bought at the peak and got caught out. I thought everybody looked at the Kmart/Sears deal that way.

Oh well, maybe it was about the retail, but I doubt it...

EconomicDisconnect said...

Great post! I think I remember that exchange.

Stagflationary Mark said...


I'm pretty sure you are right about the motivation to invest in Sears. We can't really know for sure but perhaps somebody was reading David Lereah's "To Serve Man". No wait. That was the Twilight Zone. ;)

Stagflationary Mark said...


Is that you or did your blog just achieve sentience? If it is the latter, how can I invest!!

Sorry to hear that your family got sick. My girlfriend caught something on the plane heading off to see her family (2-week trip). She's mostly over it now. Let's see if she can make it 2 for 2 on the return flight (New Year's Eve). I give her even odds, lol. Sigh.

mab said...

Just wanted to make sure that there's some joking in the comments today. ;)


Ordinarily, I'd poke fun at investment "whiz" Eddie Lampert and point out how dreadful the shopping experience is at Sears and No-Bucks. But it seems like piling on - "not my style", hahahaha!

Stagflationary Mark said...


I hear you. If I was going to pile on then I would have mentioned that I haven't shopped there in roughly a decade, their stores are/were designed to treat me like a laboratory rat in a maze (under the apparent assumption that I would buy more if I was forced to see more merchandise), and that their "Wish Book" (which I once thought was the best invention since sliced bread) has been replaced by Amazon.com and the rest of the Internet.

Not going to do it though. This is the holiday season. It's just "not my style" either, lol. ;)

Stagflationary Mark said...

Bonus thought.

I certainly wouldn't mention the Cross Pen & Pencil set that I nearly bought there just after graduating college (late 1980s).

It seemed some bright "whiz" kid in management thought it best to *permanently* affix a metal Sears tag to both the premium pen and the premium pencil (mounted horizontally where the clip was) so that I could advertise their store on their behalf.

In theory, what a great idea that was. In practice, I bought the set somewhere else. Go figure. In fact, it may have been the trigger that *permanently* altered my perception of Sears.

@#$%! I shouldn't have gone there. The comments of this post are for joking (in honor of Sears). That story is no joke though.

Scott said...

K-mart =
-dark parking lots from burnt out lights
-merchandise shelved sloppily
-decrepit store
-lousy product

Stagflationary Mark said...


"So, other than that, how did you like the play, Mrs. Lincoln?” ;)

mab said...

Not going to do it though.


Me neither. It's just not sporting. Seriously, with regards to Sears as a real estate play we could have mentioned that real estate prices in Japan have declined for two decades. "Not my style"

Stagflationary Mark said...


Perhaps I should create another Sears post at some point listing off all the things about Sears that we nearly forgot to mention.

I'd do it right now but that's not my style.