Motley Fool Gives Royalty Trades Another Award

Motley Fool's CAPS competition has given Royalty Trades the Score Club 100 award. That means we've now entered the distinguished company of all those with picks that have beaten the S&P 500 by at least 100 points.

What Do We Think About Eddie Lampert's Stock Picks?

Edward "Eddie" Lampert is the chairman of Sears Holding Corporation (SHLD). He is 316th on Forbes's list of the world's richest people, and because of his value investing style has been called the next Warren Buffett by many. During the last quarter of 2010, he picked up the following stocks: CSCO, GPS, and HRB. So what do we think of his latest acquisitions?

Cisco Systems (CSCO): We're big fans of Cisco over here at Royalty Trades. It's not one of our Top Stock Picks, but we like it's PE and its momentum.

Gap Inc (GPS): We're not the hugest fan of retail stocks, but again, with its PE and momentum, we definitely think Eddie could have done worse.

H and R Block Inc. (HRB): Now here's where we have to part with Eddie. Like the previous two, HRB has a good PE and momentum. But its most recent quarterly earnings report missed analyst estimates by quite a bit. This might be a long term value play, but for now we'd stay away.

Balance the Budget

The New York Times lets you try your hand at balancing the budget. Not so easy, is it? http://nyti.ms/bLo4RF

Homeowner Forecloses on Wells Fargo

Yes, you read that correctly. In a tale sure to warm the hearts of mortgage holders the world over, Philadelphia homeowner Patrick Rodgers, who sees himself as the Johnny Appleseed of these sorts of challenges, began foreclosure proceedings on a local Wells Fargo office. Wells Fargo had told him that he needed to take out a higher insurance policy on his house, and Rodgers vehemently disagreed. So he educated himself on the law, and here's where things got fun.

Rodgers sent a letter to Wells Fargo, asking for specific information about his mortgage. The company failed to acknowledge it had received the letter, even though it's required to do so within 20 days by federal law. So he sent two other letters reminding the company of its legal obligations. Naturally, there was no response.

Then Rodgers took them to small claims court and won a judgement, which the bank failed to pay. This led to his going to the Sheriff's office and beginning the process of initiating a public auction of the bank's possessions. At this point Wells Fargo only partially paid the judgement, so the process of foreclosure continued. Rodgers then sent notices to the media about the impending sale, and his story went viral. It was at this point that Wells Fargo contacted him and gave him a settlement that he "found quite acceptable".

Rodgers details how you too may be able to foreclose on your local bank here. 

Warren Buffett Says "Trigger Finger is Itchy"

In yet another good sign for the economy, billionaire investor Warren Buffett has stated that "[Berkshire Hathaway] will need both good performance from our current businesses and more major acquisitions. We're prepared. Our elephant gun has been reloaded, and my trigger finger is itchy."

Warren Buffett Optimistic About US Economy

In an annual letter to his Berkshire Hathaway shareholders, Warren Buffett revealed that he believes America is on the road to economy. He sees a housing recovery in the next year, and noted, "Commentators today often talk of 'great uncertainty'. But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain. Don't let that reality spook you."


Buffett also noted that he keeps $20 billion cash on hand for unforeseen events or investing opportunities that suddenly pop up. That's always been our policy here at Royalty Trades. We've often wondered why most investors don't keep at least a billion lying under the mattress just in case. 


More seriously though, we're glad that the Oracle of Omaha agrees with our assessment that a market crash isn't around the corner. Like many already have, use this recent dip as a buying opportunity.