Not so long ago, Sears (NYSE: SHLD) had become something of a value glamor stock. Journalists waxed about hedge fund manager-turned-Sears chairman Eddie Lampert's plan to turn the company into an investment vehicle -- comparisons to Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) were ubiquitous.

After yet another terrible quarter, Sears is down nearly 50% from its 52-week high, Herb Greenberg has even suggested that CEO Alwyn Lewis could be shoo-in for his Worst CEO of the Year Award.

Lampert's reputation as Sears chairman has gone from the penthouse to the outhouse pretty quickly, and he's not too happy. In fact, he's lashing out at critics. In a letter to employees on Friday, he wrote that:

While we were not pleased with these results, much of the commentary in the media and on Wall Street following the results ignores the strength of our company and the progress that we have made . . .

Ed Lampert built his reputation as a big-time hedge fund manager. He then took control of Sears Holdings (NASDAQ: SHLD) and bought K-Mart. That did not work out very well. Shares in Sears are down 25% this year and trade around their 52-week low.

The whole Sears thing is obviously embarrassing for someone who is used to making himself and his investors billions of dollars.

Lampert figured that since retail was not working out, he would try his hand at investing in banking. It seemed like a good idea. How much can go wrong with a big bank? Citigroup (NYSE: C)'s shares were under-performing the market in the middle of the year, so Lampert built up a stake of $1.3 billion, according to The New York Times. The shares are held by "RBS Partners, an affiliate of Mr. Lampert's ESL Investments."

Things have not gone well at Citi, so Mr. Lampert has lost about $471 million since late June.

Is there a lesson here? Probably nothing beyond the fact that smart people sometimes do stupid things.

Douglas A. McIntyre is an editor at 247wallst.com.

The New York Times DealBook wondered about the performance of Eddie Lampert: Both his hedge fund, and its major holding and the company that he runs, Sears Holdings Corporation (NYSE: SHLD) seem to be scuffling.

But I doubt that Lampert is too worried. As one of the few investors who has earned the distinction of frequent comparisons to Warren Buffett, Lampert has doubtless learned not to pay attention to the short-term gyrations of the market. His sophisticated hedge fund investors shouldn't worry, and they probably aren't. But shareholders in Sears may be in a different situation. DealBook has an interesting quote from a consultant:

"Lampert continues to do financial machinations rather than focusing on the stores," Steven Keith Platt, founder of Platt Retail Institute, a retail market research and consulting firm, told The Tribune. "Why doesn't he take that $1 billion and put it into the stores? The guy is great at propping up the price of the stock. He's not a retailer."

Sears' flagship stores aren't doing so well. Actually, I would argue that they're in the toilet. BloggingStocks' Julie Tilsner wrote an insightful piece that explains everything that's wrong with the company from a retailing perspective. Rather than tackling the company's operational problems Lampert has, as Platt points out, acted like a hedge fund manager and focused on financial maneuvers. But is that bad?

Sears has taken a beaten in recent months, and is down another 2% today. Investors are realizing that the stores are in trouble, but here's the question: Is Sears valuable as a Berkshire Hathaway-esque holding company with Lampert at the helm, and the underperformance of the stores presents a buying opportunity? Selling shares of Berkshire Hathaway years ago because the mills were underperforming would have been a mistake -- the mistake of a lifetime.

Sears looks cheap from a value perspective and, given Lampert's prowess as investor, it may be worth overlooking the struggling stores. This is Sears only in name, and a bet on Sears is really a bet on Lampert as a deployer of capital. Given his track record at ESL, that's a bet that may be worth making.