Eddie Lampert as the Steve Jobs of Investing

Fortune argues in its latest issue that super-investor Eddie Lampert is the Steve Jobs of the investing world. I’m not sure what to make of the comparison — does that mean Lampert is also a petulant and generally insufferable hot-head? far from it — but I’ll take them at their word. Let’s just say he’s goooood.

Eddie Lampert is the Steve Jobs of the investing world: He thinks differently, and acts differently, with extraordinary results. “He’s the greatest investor of his generation,” says fellow billionaire (and onetime mentor) Richard Rainwater, and Lampert has the numbers to prove it. His hedge fund, ESL Investments, has delivered average annual returns of nearly 30%, after fees, since its 1988 launch, according to several of its investors, who include Dell founder Michael Dell, media mogul David Geffen, and the Tisch family. Geffen, who gave Lampert $200 million to invest in 1992 (when Lampert was just 29), says that had he not periodically taken money out for diversification, he would have $9 billion today. As it is, says Geffen, “I’ve made more money from Eddie than from all the businesses I’ve created and sold.”

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Comments

  1. Obviously, Eddie Lampert is a lot smarter than me — and a lot richer — and maybe I’m just jealous because we are the same age and I look like a slacker by comparison, but to me his foray with Sears looks like a major blunder. If he had sold off the real estate and stripped the company, I would have understood it — but he’s trying to operate it, and so far failing miserably. Sounds like an overdose of hubris to me.

  2. Paul K. says:

    Yes, I’m been amazed he’s pretended to want to operate Sears. But as the opening paragraphs of the Fortune piece make clear, he is seemingly struggling for a coherent way to express where he wants the company to go. He knows how to say “no”, but he has no idea how to say “yes. While he may want Sears to be his Berkshire, as JJC argues, he ain’t there yet.

  3. ed says:

    i think it’s inaccurate to compare jobs and lampert. jobs is a creative entrepreneur, and lampert is a creative investor who is probably making a mistake by becoming an operator. lampert is, however, a credible candidate for heir to warren buffet.
    berkshire hathaway got its name from a now-defunct northeastern textile mill. i wouldn’t be surprised if ESL and SHLD are merged in some shape or form, that over time, the retailer eats shit, but the great investor continues on…

  4. anon says:

    I think people misread what the option to sell real estate at SHLD is – it is an _option_. Think of it as this: SHLD has an asset, its store base, that due to demographic trends, etc, is appreciating in value at 5% per year. In the meantime, after-tax cashflow per share is $15. As long as current cashflow is high, why exercise the option to sell the real estate? It will be there in the future, and shareholders will have received value in exchange for waiting.