Sears Holdings (SHLD) Chairman Eddie Lampert bought more AutoZone (AZO).
In just released SEC filing, ESL Partners bought another 63.1k share bringing Lampert ownership to 23.3m shares.
This follows heavy buying last week.
Disclosure (“none” means no position):Long SHLD, none
Visit the ValuePlays Bookstore for Great Investing Books
This is a long clip but worth watching. Faber says govt’s “have no other option in the long term but to print more money and that will lead to inflation.”
He makes the point that gov’t’s are trying to “ensure lending” when the reality ought to be the opposite. He says what they ought to be doing is encouraging saving and lower consumption, “but that is painful”.
He says in a recession that “ordinary” American’s will not get hit that bad but the owners of the assets will.
I tell you, the the more I look at it, the more I am thinking we are in for a period of “restrictive economic times”. Now, the argument should be made that this is good because we have been “too loose for too long”. While that may be true, like Faber says, getting back to normal will be painful and unpleasant especially for those too exposed.
It also argues against simple index funds as the major markets may go nowhere for a while but there ought to be plenty of individual winners in the mix.
What took so long?
Here are the basics..
Now this basically goes back to June when (LEH) Lehman CFO Erin Callan, being thrown to the wolves by CEO Dick Fuld said:
The whole time investor David Einhorn was saying the opposite:
The option Fuld and Callan have here simple
1- We are grossly incompetant
2- We lied.
Simple. The firm went under. So either they were lying to try and buy it time or, they just did not really know what was going on. Callan can at least say she was “following marching orders”. Fuld…not so much.
Now, if you watch Fuld’s recent congressional testimony, it was scary. One could think that perhaps Fuld has not yet accepted is firm is gone.
There is always a fall guy(s) / gal(s) when we have these events. Fuld and Callan are going to have a real hard time, real hard, convincing a jury there were being 100% honest and that they are just incompetent….Fuld, for one, seem to prideful to take the ugly option in front of him. It just may be his downfall.
Disclosure (“none” means no position):none
Visit the ValuePlays Bookstore for Great Investing Books
No matter what your politics, this is a great, very thoughtful interview. Hats off to Charlie Rose for the job he did.
Just because CEO Phil Schoonover is gone, it doesn’t mean the people who hired him and kept him there can’t continue to bury this thing…
Circuit City Stores Inc. is considering a plan to close at least 150 stores and cut thousands of jobs, as an alternative to filing for bankruptcy-court protection, said people familiar with the company.
Earlier this month, the nation’s No. 2 electronics retailer by sales hired Skadden, Arps, Slate, Meagher & Flom LLP — the law firm that oversaw the Chapter 11 reorganization of Kmart — as its bankruptcy counsel, according to several people familiar with the matter.
Circuit City also retained FTI Consulting Inc. to develop a turnaround plan and investment bank Rothschild Inc. to guide talks with banks and secure emergency financing, these people said.
What bank in their right mind right now would loan them a penny? Who?
In June of 2007 in a post that speculated on the possibility of a Circuit City (CC) bankruptcy, I said “if the economy slides any further….see ya’..”
In Sept. of 2007 I said they were on the “Bankruptcy Express”
Now, Circuit City did try to help the management that ran it into the ground by lowering the price points on their stock options in a move to keep this incompetent bunch happy. Stunningly, the performance of the company did not improve. Please note the sarcasm..
Nothing has changed from either post. The good news? The company still does have a good brand and whoever buys it in bankruptcy has a great opportunity to revitalize it. The price that will be paid will be minimal as the competition for it in the current environment will be minimal. That gives a buyer a tremendous opportunity for success. The bad news? If you are a current shareholder you will get nothing. Sorry…
Disclosure (“none” means no position):none
Visit the ValuePlays Bookstore for Great Investing Books
This is a short term arb play.
Dow Chemical will purchase Rohm & Haas (ROH) for $78 a share and the deal will close in early 2009.
Berkshire Hathaway (BRK.A) is investing $3b in the deal and it is an all-cash transaction. Currently shares trade at $70 a share under the current credit environment. Purchasers of shares today will get a 10% 4 month return (30% annualized). Downside is minimal.
What could go wrong?
Kuwait, who is buying 1/2 Dow’s commodity business for $9.5b could back out of the deal. That cash is being used for funding the ROH transaction. How likely is this? Well, when one considers that the newly formed JV is in the process of hiring personnel and setting up shop in Michigan, not very.
Berkshire could back out. Again, can anyone come up with a scenario when this has happened? Me either.
Since no debt is being used for the transaction and Dow has already received the bridge loan necessary to complete it, credit market conditions are irrelevant here.
Why did the price fall? Simple. During mass sell-offs like we have had, everything falls, whether is should or not. That gives us tremendous opportunity for very safe situational investing. What this trade is essentially is a way to park some money for 4 months with a very high probability of a 10% payoff with very little downside risk (not none, but very little).
The deals today that are at risk are the ones that depend on bank’s lending for the financing, looks for the all cash or all stock ones.
Disclosure (“none” means no position):Long Dow, none
Visit the ValuePlays Bookstore for Great Investing Books
Drunk email, 25yrs., Cramer, Selling low
– This is great….a way to stop you from sending drunk email by making you do math problems first
– 25 years since the first cell phone
– Another example to different opinions on the same day
– Cramer
Disclosure (“none” means no position):
Visit the ValuePlays Bookstore for Great Investing Books
We could all use some….this is one of the funniest video’s yet… “Little Bill vs Barney Frank”
One bear finally turns…
Whitney is buying more Berkshire Hathaway (BRK.A), MLP’s (natural gas pipelines), Target (TGT). He also said Altria (MO), J&J (JNJ), Coke (KO) were “amazingly cheap”.
Disclosure (“none” means no position):Long MO, none
Visit the ValuePlays Bookstore for Great Investing Books
Here they are, #1, and then #2, and finally this one.
On Wednesday. Sears’ (SHLD) Chairman added another 105K shares at $102 to $104 a share of the auto part retailer AutoZone (AZO).
Disclosure (“none” means no position):Long SHLD, none
Visit the ValuePlays Bookstore for Great Investing Books
A hedge fund manager who made 866% last year betting against real estate goes out with a bang….
The letter from Andrew Lahde of Lahde Capital.
Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.
Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, “What I have learned about the hedge fund business is that I hate it.” I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.
There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.
I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.
So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don’t worry about my employees, they were always employed by Mr. Springer’s company and only one (who has been well-rewarded) will lose his job.
I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life — where I had to compete for spaces in universities and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.
On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man’s interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft’s near monopoly. I believe there is an answer, but for now the system is clearly broken.
Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won’t see it included in BP’s, “Feel good. We are working on sustainable solutions,” television commercials, nor is it mentioned in ADM’s similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant — marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let’s stop the rhetoric and start thinking about how we can truly become self-sufficient.
With that I say good-bye and good luck.
All the best,
Andrew Lahde
Some Friday levity…
John McCain
Pt. 1
Pt. 2
Barack Obama
Disclosure (“none” means no position):
Visit the ValuePlays Bookstore for Great Investing Books
Berkshire’s (BRK.A) Warren Buffett penned the following Op-Ed in today’s NY Times.
From The NY Times
“THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
Why?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.”
Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.
Interestingly enough, the last time Buffett opined about the general market was 1999 when he said they were over priced (soon after the tech bubble popped). Before that one has to go back to 1974 and a Forbes Op-Ed he did in which he said the market, like today was vastly undervalued. Ironically enough, that market bottomed soon after and the Dow never again touched those levels….
Buffett’s final words in 1974: “Now is the time to invest and get rich.”
Anyone who invested with Buffett and Berkshire in 1974 surely did….many times over.
Here is the 1974 Forbes Interview
Disclosure (“none” means no position):None
Visit the ValuePlays Bookstore for Great Investing Books
Brawl, Festival, Gphone, Margin, Twitter, Late Bloomers
– If anyone has video of this, pleas email it to me…it would be hysterical
– The latest Festival of Stocks
– I will look at this phone..
– Makes sense…but millions of folks did it
– For those who do not Twitter, you are missing some very informative material
It is only a matter of time before he has 50%.
After adding 165k shares earlier this week, Lampert added another 177k on the 14th at $106 a share.
Disclosure (“none” means no position):Long SHLD, none
Visit the ValuePlays Bookstore for Great Investing Books