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Hat tip to [url=http://boombustblog.com/component/option,com_comprofiler/task,userProfile/user,1680/]Phirang[/url] on this one from [url=http://www.minyanville.com/articles/GS-WMT-TGT-SHLD/index/a/21376/from/yahoo]Minyanville[/url]:

[quote]Greetings from New York, where I spent last night reading the 20 -age letter to investors sent out by Eddie Lampert to shareholders of Sears Holdings (SHLD). Having recovered from my brief fling with Obamania, I can’t exactly describe myself as disgusted or shocked by the note. That said, for those of you wondering what a person with a complete lack of shame does when communicating with folks he’s cost billions of dollars, you’ve got your answer right here: Sears Holdings IR.

20 pages, folks. The first 6 pages cite the tough market for retailers in general, noting the bankruptcies of Circuit City, Mervyn’s and Linens n’ Things. Sears is the third largest retailer in America. Eddie’s comparison points are roughly akin to me boasting that I’m in much better health than George Burns.

Mr. Lampert doesn’t actually address the performance of Sears itself in earnest until page 6 of his report, during which he notes the company’s solid performance in Q4. Showing remarkable restraint, he doesn’t compare this performance to the bravura finish of Our American Cousin (the play during which Abe Lincoln got shot). Mr. Lampert quickly runs through a 5-point plan for turning the business around, using assorted retail truths such as a dedication to “Building our brands!”

Wrapping the turn-around plan up in 4 pages, the balance of the 20-page letter, nearly 10 full pages, is dedicated to complaining about the uptick rule, pension reform and Mark-to-Market accounting. This is from a man who effectively cashed out to the tune of $5 billion dollars in January of 2007 with SHLD in the high 170s.

For comparison's sake, in the time since Eddie’s cash out (he put the money in his hedge fund), SHLD had a market cap of around $25 billion compared to the current value under $5 billion. SHLD’s stock has fallen over 80%. During the same period, the S&P 500 is down 37%, Target (TGT) has fallen 46% and Wal-Mart (WMT) is actually higher by 14%. [/quote]

[quote]Mr. Lampert is well-liked among the money set, to the point that I’ve taken a lot of heat for being critical on the stock since I moved to New York and had the chance to shop a few of the stores. Long-term retail investing is simple. My dad taught it to me when I was 5 and, because I’m a boy, he didn’t sugar-coat it:

“A dirty store,” Ken Macke told me, “is a f**k-you to the customer”. I’ve never been in a Sears or Kmart that didn’t all but scream that vulgarity at me the instant I walked in. You can say the rule of thumb is too simplistic to be of use - but I’ve never seen it fail. I barely glanced at SHLD’s numbers, I knew Mr. Lampert’s operation was going down the second I had shopped 5 of the stores - and they all welcomed me the same way.

By my rule of thumb or using more sophisticated techniques, I don’t know a single “smart” who rode SHLD all the way down. It may even be a long trade here - but only a trade. In the long run, the place is doomed. I weep for the shareholders because, by definition, they were too poorly informed to know better than to trust Mr. Lampert to look out for them. I feel bad for the 300,000 employees, some of whom I’ve worked with over the years.[/quote]