A focus on the principles and practices of value investing from Lampert, Buffett, Graham, Fisher, Klarman, Greenblatt and beyond.

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Sears May License Craftsman, Kenmore, Diehard

A source says Sears Holdings may license its Craftsman, Kenmore, and Diehard brands. Essentially, Sears would charge a fee to outside companies to use the brand names on their products. Sears has not confirmed this licensing model but with the other recent developments involving selling Sears brands at outside retailers, I’m guessing this is in the works.

Buffett Sees No Recession

Railroad shipments are peaking as the holiday season draws near which could be a sign of an expanding economy according to . This is good news for Warren Buffett’s railroad investment in Burlington Northern.

“Our railroad carried 200,000 carloads last week,” Buffett said Oct. 4 at a Fortune magazine conference in Laguna Niguel, California. “That’s the highest total in three years. And that’s stuff moving around the country, supplying merchants and doing all kinds of things.”

Buffett added: “As of today, the recovery is still under way.”

It’s hard to go against Buffett’s optimistic view on the economy but many people are still sitting on the sidelines as far as stocks are concerned. Where there is fear, there is opportunity.

Joel Greenblatt on CNBC: Big Secret for Small Investor

Joel Greenblatt discusses a valuated index that he developed. His concept was to create an index that that is weighted toward the cheapest valued stocks as oppose to being equally or market cap weighted like the S&P 500. His index puts emphasis on finding value as oppose to just blindly buying the market regardless of value. Greenblatt states that the results tested over a 20 year period resulted in 6 – 7% better returns per year with the same beta or risk. The majority of people aren’t going to beat the market actively investing in individual stocks; therefore, Greenblatt’s index seems like a great investment that many people could benefit from in the long term. The only bad part, it’s boring

Lampert on Kmart’s Real Estate Value

There has been a lot of talk about Sears Holdings turning into a REIT lately. Eddie Lampert said in an interview for New York Magazine in 2005 that the real estate was not even factored when coming to a decision on the acquisition of Kmart. It is interesting to see how the company’s objective is beginning to shift from a retail turnaround strategy to an attempt to unlock value with existing brands. The only sure thing with Sears Holdings going forward will likely be the stock repurchase program.

Q; You say Kmart wasn’t a real-estate play.

Lampert: What I focused on when I invested in Kmart was the potential for a revitalized retail operation. We didn’t even do a separate valuation of the real estate.

Mortgage Backed Securities Explained


Here is an illustrated explanation of mortgage backed securities (MBS). This is obviously just a starting point but the video does a great job of easily explaining the concept behind these investments that we hear so much about. The Khan Academy has numerous videos on banking and money for those interested in learning more on various topics. .

Video: Buffett on the Economy and the ‘Buffett Rule”

Warren Buffett appeared on CNBC where he fielded mostly questions about the Obama tax agenda in this video. Buffett has received criticism regarding his new tax rule. Buffett clarifies his plan as follows: “My program would be on the very high incomes that are taxed very low – not just high incomes, not just some guy making $50 million playing baseball, his taxes won’t change. Make $50 million appearing on TV, his income won’t change. But if they make a lot of money and they pay a very low tax rate, like me, it would be changed by a minimum tax that would only bring them up to what the other people pay.”

Lampert’s ESL Investments Sells Shares of AutoZone

Eddie Lampert’s ESL Investments has sold $95,911,877 in AutoZone () stock over the last 3 days. ESL Investments has been dumping shares over the last year with no notable insider buying during this period.


Rogers is a big believer in raw materials, agriculture, and the future of Asia. This is an interesting hour long interview with Rogers with a Q&A; session.

DieHard Now Available at Meijer

Sears Holdings () continues to create brand value by allowing Meijer stores to carry DieHard battries. This will be the first time you can buy DieHard outside of a Sears or Kmart store. I have shopped at Meijer many times and it is not the first place you’d think to buy auto batteries; however, the stores seem to be getting way more customer traffic than my local Sears/Kmart. For those not familiar with Meijer, it is very similar to a Walmart with a grocery section. I’m surprised AutoZone () wasn’t tapped to be the first outside retailer to sell DieHard since Sear’s Chairman, Eddie Lampert and his investment fund have a huge stake in the company.

From the Sears :

“We are bringing one of America’s most trusted brands to more places and unleashing the value of DieHard,” said Chris Caruso, GM of DieHard. “For more than 40 years, the DieHard brand has delivered superior performance that consumers demand with each turn of the key. Now we are strategically expanding the distribution of the DieHard brand to provide access to America’s most preferred auto battery brand to more consumers when they need it. To achieve that goal, Sears Holdings has entered into a license agreement with East Penn Manufacturing to distribute DieHard Gold to Meijer.”

“Meijer is pleased to enhance our automotive department with the addition of DieHard auto batteries,” said Mark Carpenter, automotive buyer for the Grand Rapids, Michigan-based retailer. “Meijer customers expect the highest quality products at an exceptional value, plus the addition of the DieHard brand to our automotive offerings is yet another way we are living up to our promise of higher standards and lower prices.”

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