My average cost is 18.09. The entire Sears story is a fiasco and has been a value trap. I'm not sure what Berkowitz and Lampert still possibly see in the story as I should have realized earlier that the short-term is full of the death spirals of retailers. Besides all of us being dead in the long-run, the real estate value is difficult to discern. My original thesis in SHOS was that I felt like it was a cheaper play on the recovery of the Sears brand if it did recover, the cash flow from the earnings would continue to improve in this turn-around, and a spin-off would unlock it from the parent company Sears and improve value as investors realize it operated as a separate entity if Sears failed.
The thesis is failing in all three fronts as Sears is quickly going down in flames, the earnings in SHOS has not improved, and its fate as a separate entity has not segregated it from the sorrows of the parent.
Lessons to take from this for the future:
1) Book value means a lot less if you can't understand where it comes from (a retailer's inventory) or if the fundamentals of the earnings are deteriorating (should have realized that the competition was making headwinds against SHOS and AMZN, BBY, HD,)
2) Turnarounds are very difficult to turn around; blind hope is not a viable strategy
3) What is the exit strategy if things don't turn out the way I think it will and the time-frame for execution
Is it time go get out? It's hard to swallow that pill and take a realized loss of 74.8% on the investment.
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