Sears reports $748M net loss [pdf]

We've been buying most of our appliances from Sears.

We purchased a Kenmore refrigerator about a year ago. The thing to remember is that Sears doesn't build refrigerators, it simply puts the Kenmore name on them.

Our refrigerator had a "made in USA" sticker on it. It was built either by Whirlpool or by Amana (same thing). I like the new fridge better than the previous GE we had, but of course the book is yet to be written on its long-term dependability.

With Sears you must buy only when they are having a periodic sale. They often discount specific appliances as much as 30% or 40% during those sales. In comparison, at the time Costco was selling a down-featured version of our refrigerator for considerably more money than the Sears sale price. Also Sears will give you extras during these sales, e.g. free 1-year financing, free delivery, etc.

YMMV

Or it might be the most valuable company on the planet. Remember Apple in the 90s? They were lagging behind in technology, design and usability. Now look at Apple today.

Guy Spier also comes to mind. He won the charity auction to have lunch with Buffett and wrote "Education of a Value Investor." You don't hear as much of him or Mohnish Pabrai after the Horsehead Holdings bankruptcy.

[1] http://www.valuewalk.com/2016/09/mohnish-pabrai-horsehead-ho...

My first mistake, of course, was in buying control of Berkshire. Though I knew its business - textile manufacturing - to be unpromising, I was enticed to buy because the price looked cheap. Stock purchases of that kind had proved reasonably rewarding in my early years, though by the time Berkshire came along in 1965 I was becoming aware that the strategy was not ideal.

If you buy a stock at a sufficiently low price, there will usually be some hiccup in the fortunes of the business that gives you a chance to unload at a decent profit, even though the long-term performance of the business may be terrible. I call this the "cigar butt" approach to investing. A cigar butt found on the street that has only one puff left in it may not offer much of a smoke, but the "bargain purchase" will make that puff all profit.

Unless you are a liquidator, that kind of approach to buying businesses is foolish. First, the original "bargain" price probably will not turn out to be such a steal after all. In a difficult business, no sooner is one problem solved than another surfaces - never is there just one cockroach in the kitchen. Second, any initial advantage you secure will be quickly eroded by the low return that the business earns. For example, if you buy a business for $8 million that can be sold or liquidated for $10 million and promptly take either course, you can realize a high return. But the investment will disappoint if the business is sold for $10 million in ten years and in the interim has annually earned and distributed only a few percent on cost. Time is the friend of the wonderful business, the enemy of the mediocre.

You might think this principle is obvious, but I had to learn it the hard way - in fact, I had to learn it several times over. Shortly after purchasing Berkshire, I acquired a Baltimore department store, Hochschild Kohn, buying through a company called Diversified Retailing that later merged with Berkshire. I bought at a substantial discount from book value, the people were first-class, and the deal included some extras - unrecorded real estate values and a significant LIFO inventory cushion. How could I miss? So-o-o - three years later I was lucky to sell the business for about what I had paid. After ending our corporate marriage to Hochschild Kohn, I had memories like those of the husband in the country song, "My Wife Ran Away With My Best Friend and I Still Miss Him a Lot."

http://www.berkshirehathaway.com/letters/1989.html

Sears was the Amazon of 80's. Peering through the lens of time, the concept of a mail order catalog was no different from the convenience of today's Amazon e-commerce experience. They are both points on an evolutionary timeline of the retail distribution experience. Sears disrupted retail, just like Amazon has disrupted Sears.

What's interesting about companies like today's Amazon is that they are scared shitless they'll end up becoming another Sears and eventually dead in the water, so they are constantly investing their own profits into re-inventing themselves (see Amazon Go and drone delivery for example). And hence why the PE ratios of these companies (Amazon, Google, Apple, etc) are catastrophically high.

Also, Amazon did not start out being anything like what it is today. For years it was just books. I remember as they added departments, they would tack an extra tab onto the homepage--"CDs", "Video", etc. So what was Sears going to do? Instantly transport the entirety of a dying catalog business to a non-existing consumer Internet? That wouldn't parallel Amazon at all. Not to mention that Sears did not have access to a bunch of giddy investors who were willing to pump in money despite no sign of profitability.

Only under a superficial analysis could Sears have been what Amazon is today.

How many companies that existed pre-Sears could have been what Sears was, but weren't? This is business.

We always bought appliances from sears, but recently the refrigerator was from Lowes, and the microwave and oven from Amazon.

They don't stock appliances (very long waits for refrigerators) and the sales people can be horrible. The fridge we bought recently sight unseen, online.

The checkout process at Sears is fully fucked up. A convoluted connection of iPads, credit card swipers, and ancient IBM registers.

Best Buy also sucks, so it's not like they have much local competition.

I swore I'd never buy a large appliance from Amazon, but the in-wall oven was just fine, and I installed it no problem. If you can do your own appliance installations, I suppose online is the way to go.

When I bought a new oven, I bought it from Costco.

You mean like "do you want to apply for a credit card?"?

There's a reason for that. The associate gets $2 for every store credit card and $4 for every bank credit card sign-up. It's a big deal to a kid making $10/hr. But it certainly doesn't help the overall experience for those people who don't want another credit card.

If you were lucky.

I remember reading that article some times ago : https://www.bloomberg.com/news/articles/2013-07-11/at-sears-...

It has been posted a few time to HN.

Ayn Rand is a real thing.