Sales Down 12% ... GM's Strategy is Working

That's the same comparable store sales decline you've seen at Sears Roebuck over the last couple quarters and look at what has happened with Sears Holdings' stock since Lampert took over. It's this sort of simple-minded analysis of sales (as opposed to analysis of profits and returns on capital) that leads to equity mispricing -- come to think of it, it's this sort of simple-minded analysis that causes the poor fundamental situation in the first place.

Maybe the problem, Dale, is that you think my title is "analysis."

OK, Gordon, I will revise.

That's the same comparable store sales decline you've seen at Sears Roebuck over the last couple quarters and look at what has happened with Sears Holdings' stock since Lampert took over. It's this sort of simple-minded commentary on sales (as opposed to thinking critically of profits and returns on capital) that leads to wrongheaded thinking -- come to think of it, it's this sort of wrongheaded thinking that causes the poor fundamental situation in the first place.

Dale, I made a mistake by breaking my resolution not to respond to your comments, and now I am breaking it again. But now that I am here, I might as well explain why I made my resolution in the first place.

The problem with your comments is that you are shadow boxing, fighting against positions that I don't advocate. In this instance, for example, you accused me of "simple-minded analysis" because my title parroted the statements of a GM marketing executive. Then you offered the blazingly insightful claim that equity pricing should be based on analysis of profits and returns on capital, even though nothing in my original post made reference to GM's stock price.

My experience with you has been that by the time I get through several exchanges that are required to clarify your initial errors, I have wasted a good chuck of my afternoon. So I hereby resolve, again, not to do that.

The problem with your comments is that you are shadow boxing, fighting against positions that I don't advocate. In this instance, for example, you accused me of "simple-minded analysis" because my title parroted the statements of a GM marketing executive.

There was no irony or sarcasm whatsoever intended in your title? If not, then I am mistaken.

Then you offered the blazingly insightful claim that equity pricing should be based on analysis of profits and returns on capital, even though nothing in my original post made reference to GM's stock price.

You obviously believe there are no cognitive failures behavioral pitfalls on Wall Street. If not, why would it be obvious that revenues don't dicate the value of a company when so many purported equity analysts and investors couldn't get past this 18 months ago upon the merger of Sears and Kmart? The resulting stock was obviously mispriced. I am pointing out it's the job of management to increase the value of the equity of a company and one potential route to do that is by letting revenues fall. The implication from your post is this is a bad tactic.

My experience with you has been that by the time I get through several exchanges that are required to clarify your initial errors, I have wasted a good chuck of my afternoon. So I hereby resolve, again, not to do that.

My experience has been you like to imply things and then you won't stand by your implications. The best example of this was on Amazon, where you implied or said the company's strategy was to "lose money on each item and make it up on volume." Har har. I'm sorry that was so blindingly wrong I had to spend so much time dissuading you from that belief (given your apparent ignorance of accounting and corporate strategy). It's interesting you now believe I was the mistaken one needing your remedial attention.

But whatever, don't respond. I just can't help myself, though, every time I read this blog I see something needing a comment.