ARE ALL THE BANK ANALYSTS BLIND?

Implications: While I realize that the Title is somewhat provocative and the Subject somewhat misleading, both are well deserved.   As my Commentary will show, those analysts who have been following SHLD and singing the praises of Eddie at every opportunity, are finally becoming disenchanted with his efforts. However they continue to blindly repeat their mantra about the stock having an "intrinsic collateral value" based solely upon some uninformed and ludicrous calculation of leased and owned real estate values.

Analysis: As GLG News readers will remember, numerous articles have been written over the past two years that totally debunked the myth of SHLD's real estate values. 

While some of my recent articles have focused on the silliness of ascribing billions of dollars of value to SHLD's leasehold interest in 1200 K-Marts and 300+ Sears stores, it appears that either they have been ignored or totally discounted as the ramblings of a madman.

The same can be said for the 500+ owned Sears stores, most of which are located in regional malls. Several of this writer's articles have clearly focused upon the use restrictions contained in the REAs and the fact that the demand for empty department store space in "B" & "C" level malls is non- existent. There are several other equally important reasons for the lack of meaningful value of department stores in malls but the two mentioned above have been sufficient to persuade any reasonably bright hedge fund analyst. Those I have talked to about this have all agreed but none of the bank analysts seem to understand.

What this latest round of Eddie's baloney tells me is that the love affair with "the next Warren Buffet" is so compelling that it provides a reason for otherwise hard nosed professionals to
overlook what has long been obvious to every experienced real estate professional in the department store or regional mall development business.

Readers of the GLG News who have been convinced of the minimal real estate value of SHLD's portfolio, should congratulate themselves for their due diligence prowess and ability to avoid the cult-like belief system that has blinded so many of their brethren.