Chicago has a special relationship with billionaire hedge fund investor Edward Lampert due to his position as chairman of Sears Holdings Corp. Sears, Roebuck and Company, or Sears, as a good number of you may already know, is a chain of department stores that has its headquarters in the Chicago suburbs. As such, I wasn’t surprised when the Chicago Tribune’s Sandra Jones wrote a piece last week that dissected Mr. Lampert’s investments as of the end of last quarter. Jones wrote:

ESL Investments Inc., Lampert’s Greenwich, Conn.-based hedge fund, began buying shares in credit card issuer Capital One Financial last year. The fund held 9.9 million shares, valued at $504 million, as of Sept. 30, according to documents filed with the Securities and Exchange Commission late Friday. The fund also said it bought 34.6 million shares of mortgage giant Fannie Mae, valued at $52.9 million, in the quarter ended Sept. 30.

The U.S. government took control of the Federal National Mortgage Association, known as Fannie Mae, on Sept. 7, after a wave of mortgage defaults.

Additionally, Lampert’s fund bought 550,000 shares of Hartford Financial Group Inc., worth $22.5 million, and nearly doubled his stake in CIT Group Inc., to 7.3 million shares worth $51 million, in the quarter, the filing said.

Lampert owns 52 percent of Hoffman Estates-based Sears through ESL, making it his largest equity investment. He also holds large stakes in AutoNation Inc., AutoZone Inc. and Citigroup Inc.

Source:

“Lampert takes hit on Sears holdings”
Sandra M. Jones
Chicago Tribune, November 15, 2008

Edward Lampert, who some call “The Next Warren Buffett,” has been busy buying up stocks of the nation’s largest car dealer. According to the Associated Press yesterday:

Billionaire investor Edward S. Lampert continued to buy shares of AutoNation Inc., putting nearly $1.4 million more into the nation’s largest car dealer last week.

Lampert, a former AutoNation director who was already the company’s largest shareholder, bought 228,700 shares for between $5.90 and $6.15 per share on Thursday and Friday, according to a regulatory filing.

That follows purchases of 529,000 shares for $3.2 million, announced earlier last week. Lampert-controlled entities now own more than 78.6 million shares, or nearly 44.5 percent of the Fort Lauderdale, Fla., company’s outstanding stock.

Source:

“Eddie Lampert again raises stake in AutoNation”
Associated Press, November 17, 2008

Legendary bond investor and managing director of the PIMCO family of bond funds Bill Gross made an appearance on CNBC yesterday and talked about what investors should be considering these days. According to the CNBC website:

Gross also said bond investors want to buy what the government is buying.

“The Treasury is buying agency mortgages in the secondary market as well as bank capital preferred stocks via the TARP,” he said.

The government may extend the reach to subprime mortgages and insurance and auto companies, Gross said.

Companies like Ford Motor and General Motors, for instance, are attractive, he said.

Source:

“Pimco’s Gross: Rates To Hold Steady Or Decline More”
CNBC, October 29, 2008

William Hanley of the Financial Post (Canada) caught up with legendary investor Jim Rogers while he was in Canada this week. Despite the U.S. government’s growing interventions in the financial system, the CEO of Rogers Holdings is still skeptical of a positive outcome. Hanley wrote:

“I’m pessimistic because America is in recession and that’s having an effect on Europe and Asia,” he says, adding that the recession will last longer than most and be deeper than most because the U. S. government keeps making mistakes by bailing out one entity after another.

“The 29-year-olds on Wall Street and Bay Street have been driving Maseratis,” Rogers says. “That’s about to change. All these guys are going to have to learn to drive taxis.”

The former partner of George Soros in the Quantum Fund believes there will be quite a few brokers-turned-cabbies due to changes taking place on the financial landscape. Hanley wrote:

“The new financial centre could be in Shanghai or maybe in Singapore,” Rogers says. “I really don’t know where, but it’s shifting from New York and London toward Asia.”

Rogers shared his investment strategy with the Financial Post reporter. From the piece:

He continues to own the commodities themselves, not commodities stocks, because the current drop in natural-resource prices is just a correction that could last a quarter, a half or even a year…

He has been buying shares in some airlines, “a disaster area that’s close to a bottom,” and some beaten-up Chinese stocks… Meanwhile, he is monitoring auto stocks, which may become the next disaster area over the coming years…

Rogers is holding on to the Canadian dollars – “one of the soundest fundamental currencies” — he began buying years ago when he saw the commodities boom unfolding against a much-improved Canadian fiscal backdrop. “And I will be buying more along the line.” But recently he has been buying Swiss francs and yen.

He has been shorting the U. S. long bond in the belief that the growing mountain of U. S. debt and the necessity to print money to finance it means bonds have made a long-term top. “Bonds will be a terrible place to be for many years to come.”

And for years to come, Rogers says, water treatment, agriculture and Chinese tourism will be good places to be. China and India, especially, have huge water problems, food inventories are falling even as farmland is taken out of production and 1.3 billion Chinese are now able to travel freely in the world.

Those are the next big things. The best thing to do now in these clamorous markets, Rogers tells a reporter, might be to do nothing unless you have to. “You might just want to head to the beach.”

Sanya, China
“The Hawaii of Asia”

CEP News’ Christine Wong also got the chance to talk to the Singapore-based investor a few hours ahead of his scheduled speech to the Toronto Chartered Financial Accountants Society. She wrote yesterday:

“The American government is getting it wrong… and bailing out the wrong people.” He accused the U.S. lawmakers behind the bailout plan of trying to “bail out their banking friends.”

He predicted that in two years, when other problems crop up in the U.S. financial system, “the American government will be out of bullets.”

Rogers pronounced that “America is in a recession and the world is in a recession.”

Wong also noted that Rogers isn’t too impressed by the Republican and Democratic candidates for the White House. She wrote:

U.S. presidential candidates Barack Obama and John McCain were also in Rogers’s firing line.

“Neither one of them has a clue. Both would be disastrous” for the U.S. economic recovery, he said.

Sources:

“Contrarian becomes pessimist”
William Hanley
Financial Post (Canada), October 3, 2008

“Canada Will Feel U.S. Problems, But Won’t Suffer as Much, U.S. Investment Guru Says”
Christine Wong
CEP News (Canada), October 2, 2008

Looks like the “Oracle of Omaha” likes green cars. And I’m not referring to the color. From Reuters’ Joanne Chiu and Alison Leung this morning:

Billionaire Warren Buffett’s investment in Chinese battery maker BYD has given the firm cash and credibility to pursue an ambition of making “green” cars, analysts said, helping its shares nearly double on Monday.

Shares in BYD, which began life as a maker of rechargeable batteries but now also makes mobile phones and automobiles, soared 90 percent at one stage after resuming trade following a morning suspension. They ended 42 percent higher at HK$11.90.

On Saturday, MidAmerican Energy — a unit of investment guru Buffett’s Berkshire Hathaway — agreed to buy a 10 percent stake in the company for $230 million, which investors took as an endorsement for a rapidly growing firm.

The deal gives MidAmerican a foothold in the Hong Kong-listed company, which is developing electric and electric-hybrid cars that can also run on petrol as a back-up fuel.

According to Chiu and Leung, BYD had planned to begin sales of its cars in the United States by 2011. With Buffett’s and MidAmerican Energy’s backing, it now hopes to move this date up.

The Reuters reporters also noted that MidAmerican is also interested in BYD’s research capability in rapid-charge and rechargeable battery technology, and power storage technology.

Source:

“UPDATE 2-Buffett’s BYD endorsement sends shares soaring”
Joanne Chiu, Alison Leung
Reuters, September 29, 2008

MarketWatch’s Sam Mamundi wrote this morning:

The investment vehicle of legendary investor Warren Buffett increased its stake in transport outfit Union Pacific Corp. by almost double in the second quarter.

Berkshire Hathaway also added stakes in Bank of America Corp. (BAC), Lowe’s Cos. (LOW), and NRG Energy Inc. (NRG), according to filings released this morning.

Berkshire Hathaway (BRK.A) grew its Union Pacific (UNP ) stake from 4.453 million shares at the end of the first quarter to 8.906 million at the end of the second quarter. Union Pacific stock is up 23.6% this year…

Berkshire addition of NRG Energy Inc (NRG ) totaled 3.24 million shares in the second quarter, worth $139 million. While NRG’s stock is down 18.7% this year, the energy sector is considered a good investment by money managers right now.

The two sell-offs in Berkshire’s portfolio in the recent quarter were both related to acquisition deals. Trane Inc. was sold off in an acquisition by Ingersoll-Rand Company Ltd (IR). Similarly, Berkshire eased its stake in Anheuser Busch Cos. from more than 35 million shares to less than 14 million shares in the wake of Anheuser’s merger with InBev which had yet to be consummated as of the second quarter.

MarketWatch’s Greg Morcroft also reported this morning:

Shares of Lehman Bros. Holdings Inc. rose more than 6% at one point Friday as news that famed investor George Soros’ hedge fund boosted its stake in the company brought out buyers.

An analyst report from David Trone at Fox-Pitt Kelton also lent support to the shares. He said that Lehman’s upcoming losses should be smaller than the second quarter’s as hedges in place at the firm appear to be working.

Soros Fund Management has raised its stake in Lehman Brothers (LEH) to 9.47 million common shares at the end of June 30, up from 10,000 shares at the end of March 31.

The fair market value of the stake is estimated at $187.7 million, according to a regulatory filing by the fund Thursday.

Reuters’ Karen Wutkowski noted yesterday:

Billionaire investor Eddie Lampert cut his stake in Home Depot Inc (HD.N) by 13 percent to 19.7 million shares as of June 30, according to a disclosure document for his fund RBS Partners.

The fund also increased its stake in AutoZone Inc (AZO.N) to 22.9 million shares from 22 million shares the prior quarter, according to a filing with the U.S. Securities and Exchange Commission. It cut its stake in KB Home (KBH.N) to 358,000 shares from 605,000 shares.

Sources:

“Buffett’s Berkshire doubles Union Pacific stake”
Sam Mamudi
MarketWatch, August 15, 2008

“Soros buy puts shine on Lehman shares”
Greg Morcroft
MarketWatch, August 15, 2008

“Lampert cuts Home Depot stake, ups AutoZone holdings”
Karey Wutkowski
Reuters, August 14, 2008

Edward Lampert, Chairman of Sears Holdings Corporation, and founder, Chairman, and CEO of ESL Investments, has acquired 40% of Florida-based AutoNation Inc., the largest American auto dealership. Reuters’ David Bailey wrote yesterday:

Billionaire investor Edward Lampert has raised his stake in AutoNation Inc the biggest U.S. auto dealership group, to about 40 percent, according to documents filed on Wednesday with federal securities regulators.

Lampert, the largest shareholder in AutoNation, disclosed the acquisition of another 396,600 shares on Tuesday in the auto dealership group, running his stake to about 71.5 million shares, held mostly through various affiliates.

Lampert, who has been called “The Next Warren Buffett,” previously served on AutoNation’s board.

Source:

“Lampert AutoNation stake reaches 40 percent”
David Bailey
Reuters, June 4, 2008

This morning, Reuters India is reporting that billionaire investor Eddie Lampert has increased his stake in AutoNation Inc., the largest American auto dealership, to nearly 40%. Lampert, AutoNation’s biggest shareholder, disclosed in federal regulatory filings that he had acquired more than 1 million shares on Friday and Tuesday through affiliates, which leaves the investor with 70.7 million shares of the Florida-based company.

The announcement comes on the heels of the disclosure by Lampert on Tuesday that he had also acquired 521,000 shares of AutoNation back on May 22.

Source:

“Lampert adds to AutoNation stake, nears 40 percent”
David Bailey
Reuters (India), May 29, 2008

Eddie Lampert, the billionaire investor known as “The Next Warren Buffett,” continues to acquire more shares of AutoNation Inc., according to Reuters yesterday. David Bailey wrote:

Billionaire investor Edward Lampert has increased his stake in AutoNation Inc the biggest U.S. auto dealership group, by more than half a million shares to about 39 percent, according to federal regulatory filings on Tuesday.

Lampert, the largest shareholder in AutoNation, acquired 521,000 shares on May 22 for prices ranging from $15.44 to $16, raising his holdings to about 69.6 million, according to filings with the U.S. Securities and Exchange Commission.

Lampert, who is also the chairman of Sears Holding Corp, previously served on AutoNation’s board.

Source:

“Lampert adds more to his AutoNation stake”
David Bailey
Reuters, May 28, 2008

According to recent regulatory filings, Eddie Lampert, billionaire investor and chairman of Sears Holdings Corporation, has been steadily increasing his stake in the largest U.S. auto dealership group and auto parts retailer. Reuters reported this past Tuesday that Lampert has increased his holdings of AutoNation, the biggest U.S. auto dealership group, to just under 39%. Lampert, who is the largest shareholder of AutoNation, disclosed the acquisition of an additional 145,600 shares on May 16 in filings with the U.S. Securities & Exchanges Commission.

The investor, who is often referred to as “The Next Warren Buffet,” has also been actively acquiring stock of AutoZone, the largest U.S. auto parts retailer. According to Reuters on May 20, Lampert has increased his stake in the Memphis, Tennessee-based company from around 31% to just over 36% recently.

Sources:

“Lampert ups stake in AutoNation to 39 pct”
Soyoung Kim
Reuters, May 20, 2008

“CORRECTED - UPDATE 1-AutoZone earnings rise, stock up”
Christopher Kaufman, Kevin Krolicki
Reuters, May 20, 2008