Edward Lampert, Founder of ESL Investments and Chairman of Sears Holdings Corporation, has released his annual letter to shareholders. Mr. Lampert’s investment style has often been compared to Warren Buffett’s approach particularly when it comes to capital allocation. While many companies fail to adhere to disciplined capital allocation practices, Sears has taken a more intelligent approach. Read this article for more details.
No one enjoys dwelling on past errors whether we are talking about investments, career choices, or poor decisions in personal relationships. It is far more pleasant to think about what has worked well in the past and to relegate unpleasant memories to what George Orwell referred to in 1984 as the “memory hole”. Read this article for a case study in faulty investment decision making.
In a conference call this afternoon, Bruce Berkowitz answered a number of shareholder questions regarding The Fairholme Fund, the state of the overall stock market, and prospects for health care reform. Mr. Berkowitz’s record at The Fairholme Fund since its inception on December 29, 1999 has been nothing short of extraordinary. Based on the fund’s semi-annual report dated June 30, 2009, annualized performance since inception has been a gain of over 12% annualized compared to a loss of over 3% annualized for the S&P 500. Read this post for a summary of the conference call.
Over the past decade, there has been a significant divergence between Wal-Mart Stores’ experience from a business perspective and the returns experienced by the company’s shareholders. In April, I wrote an article outlining Wal-Mart’s track record over the past ten years and the risks of overpaying for a strong growth record. A position in Wal-Mart was initiated today with shares of Sears Holdings sold to fund the new position. Read this article for more details.