Eddie Lampert of Sears is forced into his own share buy back program

Hey, stock investors! what happens to one of your positions when you fully realize that you are "long and wrong?" Well, there are multiple strategies, of course. Sell, admit a mistake, and exit your position. Hold and hope for price recovery. Enter into some sophisticated options positions.

Eddie Lampert, formerly known as The Next Warren Buffett, has experienced the "long and wrong" feeling with his beloved basket-case of a retail turnaround project better known as Sears (NASDAQ:SHLD). Currently selling for a cool $34 a share (52 week lo/hi 28.89 - 94.79) this dog of a stock has most certainly seen better days. Plus, from an operational standpoint, the news gets worse and worse month after month.

What is happening now to Eddie is that he is not just "long and wrong" with his personal holdings in Sears, but with his managed hedge fund as well. To placate his restless hedge fund investors, he has personally bought more Sears stock directly from the hedge fund to emphasize that he is "long and wrong" with conviction! Go, Eddie,go Eddie!

File this move under averaging down, doubling down or forced to eat his own shares under duress.

NY TIMES: Sears article


Eddie is receiving alot of quality strategic advice these days on this investment matter. Such as: dump Kmart, stop watching the movie Groundhog Day and take a part-time job at Walmart to learning retailing from the ground up. The Sears turnaround attempt will make for a great movie some day and/or a compelling Harvard Business School case study.

But, best of all, most think Eddie is still a high quality investor and that Sears is one of his few serious mistakes along the way.

So, we at Think Billions, wish Eddie Lampert well and hopes he enjoys a profitable 2012.