This Is a Sign - Greed Is Good

Eddie Lampert, the CEO of Sears, loans the company 200 million dollars from his hedge fund.  Investors go crazy and start buying up the stock.  The stock goes up 9%.  Then it is up another 3% this morning.

This Is a Sign - Greed Is Good

note: This is an opinion piece and not a recommendation to buy or sell Sears stock. Bob Brooks nor clients of Bob Brooks have any short or long financial interest in Sears within his management program.

Eddie Lampert, the CEO of Sears, loans the company 200 million dollars from his hedge fund. Investors go crazy and start buying up the stock. The stock goes up 9%. Then it is up another 3% this morning. Now this is the same company that Eddie Lampert admitted to a few months back that they might not make it. What CEO actually says something like that? This is the same company that faces the same problem as many other retailers. They don't have a business model that can compete with the monopoly they call Amazon.com. (Which begs the question. Will Amazon.com ever be accused of being a monopoly?) This is the same company that is getting sued by its' employees alleging that Eddie Lambert encouraged the employees to buy company stock. Of course those employees that followed that encouragement lost millions of dollars. Finally, this is the same company that needs a 200 million dollar lifeline to survive. Of course that is not how they are spinning it.

Help me understand what makes Sears a good investment? An investment in Sears is not an investment. It is a gamble that 200 million dollars is going to make them look short-term profitable when the long-term problems have not been solved.

Gordon Gecko in the 1987 movie Wall Street famously said, "Greed is Good." Greed and speculation are signs that we are in the final innings of a bull market that is out of balance and spinning out of control. Investors get bullet proof in the final stage of bull market cycle. To me, you would have to be bullet-proof to invest in Sears stock.

On the surface, this appears optimistic for brick and mortar department stores like Sears, but I agree with Bob in that the $200 million loan to save the store will not save it long term. Online retailers are the way of the future, for better or worse, so department stores have to start scaling back and focusing their efforts toward strong online presences.

@lbrindley - amazon.com makes it so easy. However, I still can't make clothes shopping make sense online.

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@BobBrooks, I agree with you on that. I too prefer going to a store and trying on clothes before I buy them. However, Amazon and other online clothing retailers make it easy to return clothes if they do not fit or do not look as you had hoped they would when you ordered them. I do not think that clothing stores will be completely phased out any time soon, but I do not think that they will be as large as they have been historically in the next few years.

Sears is going to sell Alexa-enabled appliances on Amazon; shares jump 19%

Sears is going to sell Alexa-enabled appliances on Amazon; shares jump 19%

by: Lauren Thomas

Sears announced plans to sell Kenmore-branded appliances on Amazon.com, which will feature special capabilities with Alexa.

Sears' stock went up another 19% today in light of their new "alliance" with Amazon!

@lbrindley - oh the irony. To survive you have to join the enemy who is taking you down or amazon will make a little money off of them on the way down. Either way Amazon.com just makes money. The whole alexa thing is not a game changer - getting to become a amazon retailer is though - it is hard to get that contract

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