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Sears Holdings (SHLD-NASDAQ, $52.08) reported their fourth quarter results this morning and the results were TERRIBLE but we already knew that because the company pre-announced on December 27, 2011 that these results would be terrible.  The company reported fourth quarter earnings of $0.54 compared to earnings of $3.67 in last year's fourth quarter.  So, what happened to the stock today?  At the time of writing the stock was up almost 15% to $59.70. Sears Holdings has been a darling of short sellers, who for the last few years have been big winners, on the premise that the continued poor operating results would drive Sears into bankruptcy and the share price to zero.  The focus of the conference call this morning (the first time in its history as Sears Holdings that it has had an earnings conference call) was on the company's liquidity and balance sheet.  The company's CFO, Rob Schriesheim, outlined...

News of 13F filings has come out over the last few days and has provided further insight into some of Research In Motion’s (RIM) newer shareholders.  Prem Watsa, through Fairfax Financial, purchased a small amount of new shares in the fourth quarter of 2011, but it has been reported that he has approximately doubled his holdings last month following the company’s change in management.  Leon Cooperman of Omega Advisors also doubled his position during the fourth quarter.  David Einhorn of Greenlight Capital (noted for his large short position in Lehman Brothers prior to its collapse in 2008) has established a new position in RIM. The news on RIM has continued to be poor so far this year with further corporate defections from Blackberry to iPhone, which has helped fuel the huge rise in Apple and further decline in RIM.  As wonderful as Apple has been for the portfolios (and yes it...

The strength of North American equity markets so far this year has been a very welcome surprise.  The other welcome surprise is that the co-relation among stocks so far this year has come down dramatically from last year’s everything up and everything down together market. The chart below depicts the reduced co-relation as the S&P 500 index is back to its highs of last spring but far fewer stocks (the white line) are making new 52-week highs.  A market optimist might say normalcy is coming back to the market and that the market leaders will continue to lead the market higher.  A market pessimist might say that the rally this year has been led by a few big-movers (i.e. Apple, Caterpillar and Visa, to name three) and is vulnerable to a decline.  Not to be seen as sitting on the fence, but in the short term I would agree with the...

A great employment number and market rally on Friday and a great Super Bowl on Sunday with the Giants' win positively triggering the largely irrelevant “Super Bowl Indicator” was the right way to start February.  North American equity markets, particularly in the US, have started very strongly in 2012, to the surprise of many investors.  Valuations and monetary conditions remain very positive but in the very short term, markets may be a little over-bought and subject to a bit of a pullback.  That being said, I think the comments and chart below from Jeffrey Saut, the market strategist at Raymond James are definitely worth heeding. “Remember all those Negative Nabobs that caused you to panic and sell-out at the August lows? Or, the Bear Boos who told you the undercut low of October 4, 2011 was the start of a whole new leg to the downside? Then there was the Cowering...

It is another beautiful warm sunny January day in Toronto, which is great except if you are selling furs or natural gas.  With more warm weather forecasted for February, chances are natural gas prices, currently at 10-year lows of approximately $2.50 per mcf, will continue to be soft through the rest of winter.  That being said, I attended a Peters & Co. lunch presentation today by Tourmaline Oil Corp (which in spite of its name is 80% natural gas) and came away feeling very glad that I continue to hold it in clients’ portfolios in spite of the weak natural gas outlook. Tourmaline has done most everything right since its creation just over three years ago and its initial public offering (IPO) in November 2010.  Since the IPO, production has more than doubled and using very conservative company forecasts is expected to double again in 2016.  There is not much management...

Volume 1, Issue 1 What better day than today to post the first blog entry on the Padlock Investment Management website. After trading higher in the pre-market, Apple closed the day at $446.66 or up 6.24%. Take what you like from the fact that the last three digits of today’s closing price were “666”, which also happened to be the market-bottom March 2009 low on the S&P 500 index, and the market-bottom November 2011 low on the Russell 2000 index, the results reported yesterday were wickedly outstanding results.  As good as I thought the results could be, I never dreamed that the results would be that good.  For a review of the results click on today’s Wall Street Journal story. In spite of the 6.24% increase today, Apple remains a cheap stock and the largest holding in the portfolios.  Notwithstanding that I believe that there is further upside in Apple beyond today’s levels, I...

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