SHLD

Fairholme's Q3 portfolio has been filed. New or increased positions include WYE, CAH, BRK.B, HUM, SPR, BRK.A, SHLD, JOE, LUK, RRR, and WTM.

Tonight's Of Mutual Interest interview focuses on a leading large cap value fund -- The Fairholme Fund (FAIRX). NBR's Paul Kangas asks Fairholme's Bruce Berkowitz about the fund's performance. Berkowitx also talks about some sectors he likes.

Value Investor Mohnish Pabrai

Eddie Lampert and Sears Holdings will have to pay for the Delphi pension bailout.

Todd Sullivan looks at Sears Holdings new concept of MyGofer, which provides conveniet retail order and pickup service.

Notes on what Eddie Lampert had to say to shareholders on the May 4, 2009 Sears Holdings annual shareholders meeting.

Sears Holding Corp., the largest U.S. department-store chain, is seeking to extend a portion of its $4 billion revolving loan in exchange for higher interest rates, according to people familiar with the negotiations.

 OID interviews value investors Bruce Berkowitz and Charlie Fernandez of Fairholme Funds.

Warren Buffett and Charlie Munger have learned that retailing is a very tough business. Yet, more of our family’s dollars find their way to Target than any other, even though Wal-Mart often offers better prices. Are we fools, or does Target offer some which it competitors do not?

Patience is a value-investing virtue and, like Graham, I tend to pay attention to the scale more than the ballot box.

A third form of influence that can be detrimental to investment performance is social proof. That is, when “we determine what is correct by finding out what other people think is correct.” Yet, out there in the investing world some actors know what they are doing, but other prominent actors clearly do not. Who then do we follow?

What defines a value investor? Many think that value investing is about picking stocks with low PE ratios or stocks trading under book value...

Yesterday we briefly compared the equity of Sears Holdings to its outstanding “junk” bonds and found that an investor with a short time horizon (say 2-3 years) may find comparable or superior value in the bonds when compared to its equity. Today, we use Benjamin Graham's insights into bond valuation to evaluate the risk of Sears bonds in greater detail.

As of March 4th, the market priced the equity of Sears Holdings at around 4.5 billion and over 50% of that equity is held by Eddie Lampert’s ESL Investments and ESL Investors. Sears Roebuck bonds currently carry a ‘junk’ rating of BA2 from Moody’s and BB from S&P and currently trade at yields to maturity of 20-25%. With these facts, which is a better buy?