This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.
In the past few years, there have been numerous comparisons made between Eddie Lampert of Sears Holdings (NASDAQ: SHLD) and Warren Buffett of Berkshire Hathaway (NYSE: BRK.A). We see these all the time in every medium and all walks of life. "He's the next Jordan; it's the next Microsoft," and sometimes our society even goes so far as to mock itself like with the "New Coke." No new Coke, no new Jordan, no new Microsoft Corp. (NASDAQ: MSFT), and definitely no new Buffett.
That said, it doesn't take anything away from our new icons of success, but please give them the space to be themselves. Kobe Bryant is not Jordan and never will be. Michael Jordan was unique. But Kobe is great in his own right. Comparisons are worthwhile to give the observer a point of reference (see Einstein about that). Warren Buffett is unique. He will not be replaced. I am not one to believe everyone is replaceable. If such a thing was even remotely possible, bring the me your candidates to replace Einstein, Shakespeare, and Da Vinci. In the investing world, that is the level that Warren Buffett has managed to attain, and he is warmly referred to as the Oracle of Omaha.
Warren Buffett has established the strongest investment record of all time, and in today's soft market the diversified Berkshire Hathaway stock is a safe haven (See: Serious Money: Safe havens -- T-Bills or Warren Buffett?) and recently closed up in a down market reaching $119,500 per share, up $200 (BRK.B shares up $21.95 to $3,978.95). I think it it's still significantly undervalued, even though it has the highest share price of any public company. (See: Chasing Value: Berkshire Hathaway -- the time is now.) I have written about Buffett many times and think you absolutely must develop an understanding of his investment genius or get out of the game (See: With Warren Buffett by my side . . .).
Eddie Lampert, like Buffett is an extraordinary value investor and has made billions of dollars with value-added turnaround plays like buying Kmart and then Sears, and wrapping them together neatly into a growing holding company that people have compared to Berkshire in it's early days. It is not a safe haven though, and recently closed at $135.85, down -$6.37 (-4.48%) notably underperforming the market.
Lampert has risen to billionaire status by taking some big swings and being shrewed in his deal-making and management prowess. However, most of Buffett's record is behind him and he is still going strong. I admire Lampert, but most of his career from a historical perspective is in front of him. I do not anticipate he will ever go hungry, but he has not reached the level at which Buffett will be passing the baton anytime soon.
Disclosure: I own shares of Berkshire Hathaway BRK.B common stock.
Read Chasing Value or Serious Money to find potential opportunities, and to verify my track record, as well.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.
Vote in our poll for Eddie Lampert or Warren Buffett, and let us know in the comments why your choice has the financial edge in this match-up. Also be sure to check out our other Money Face-Offs.
Entrepreneur's Journal: Putting together a solid sales contract
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Reader Comments (Page 1 of 1)
9-16-2007 @ 11:50AM
r.wayne marshall said...
Great stuff enjoyed the comparison
9-16-2007 @ 12:04PM
rm9420 said...
Thanks
9-17-2007 @ 9:01AM
michael euringer said...
Lambert's recent winners have caught my attention.
9-22-2007 @ 10:17PM
John said...
Eddie is to Warren as a crack dealer out to hustle a personal fortune over the broken lives of his victims is to an honest, long term, community minded and responsible entrepreneur. No true comparison is possible. Shld will crash and burn over the next four quarters, investors will loose millions, even more competent seasoned workers will be let go, the corporate memory of the most effective practices and processes in retail will be exorcised, and in the end, Eddie will do just fine - but just for Eddie.
9-18-2007 @ 8:42PM
jj said...
well i am unique, i have significant positions in both berkshire hathaway (b shares) and sears.
i believe that there is a large spot in investment pantheons for both of them. i have read many articles and books on berkshire h and many articles on lampert. someone said that lampert at his age exceeded warren b when he was lampert's age. each style is different. that is what makes investing so interesting.
remember tiger woods is now on the verge of seriously challenging jack nicklaus's golf records and each each is different in their approach to golf.
obviously i am rooting for both of them. but i do believe that it would be a good idea to have 300 shares of sears holdings at this price so when it goes to $3,000 in ten years , well you do the math.
i think that lampert is more of an electic investor, but he is far from reckless. remember he owns 53% of shld and i don't think he is going to sell it from underneath us any time soon.
i am younger than warren and older than lampert. i believe that one's portfolio should have a generous helping of both.
9-19-2007 @ 9:43PM
rm9420 said...
Thanks
9-24-2007 @ 1:28PM
jnybgood said...
Alwyn Lewis, from KFC...what does he know about retail? Would you like that original or spicy? Give me a break! What's going on here?
10-23-2007 @ 10:52AM
Tony Beth said...
John,
I'm with you. Eddie Lambert is as much a criminal as the guys who "supposedly" kidnapped him when the Kmart deal was going down. I wonder if they are going to be as rich as Barry Bond's trainer when they get out of jail.
And as far as Al and his background, he's perfect: has gone from flipping burgers to flipping companies. Look at the diminished Board of Directors. Nothing but private equity people. Just one person with retail background, unless you count the hours some might have worked in their private club country club pro shops during their teen age years.
Tonya Beth