Comments
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MTF- two months after this trade you would hv been stopped out if you held til today the stock trades at $39 bucks nothing close to $80 dollars a share .... F-
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ARSears filing for Bankruptcy. Good luck with this trade! My "ad hominem attack about his (Jeremy) age", Mr Joel W., is rooted in the observed truth that inexperienced participants always underestimate risk. Jeremy's about to learn the folly of aping his hero (Mr Buffet) who holds a different risk/reward position ($35 entry + loan) to his trade idea.
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AHSince you have studied this spin off from Sears, have you studied SHOS? Another misunderstood spin off from sears that looks to be way undervalued if they can get operations stabilized.
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ARJeremy is a young man with (3yrs out of uni). He has spotted an opportunity for the discount between SRG & the market leader (31x bigger) to close. He draws comfort from WB's personal stake in SRG. Buffet bought @ $35, de-risked himself with a loan to SRG and has nobody to answer to if the trade fails. Buying SRG today @ 49 on an 18m view = picking a subjective argument with Mr Market over the size of the discount. Hopefully JS gets lucky and locks in a profit, but he's kidding himself think he's getting "same exact exposure as Buffett".
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PBI would love to know the math behind the assertion that the stock is currently trading below its Net Asset Value. I did the numbers and could not arrive at the same conclusion, but I am no expert on the real estate.
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ARComparing SRG with a REIT, 31x bigger = picking an argument with the market over how big the discount should be. Too subjective. WB's entry @ $35 + loan = vastly different risk/reward. Owning a different stock to WB, that share the same code. HFs love to short the "slow bleeds". They make great funding trades for their longs.
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ARContrarian trades are seductive because that's how WB made his fortune, plus you feel and sound smarter than you would discussing a consensus trade. Q : Can you demonstrate (in numbers) how you arrive at the $1.7bn of value that the market is ignoring?