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Lampert Goes Loco Over Short Selling

Hedge fund manager Eddie Lampert, who is chairman of Sears is sounding off.

In a 15-page annual letter to Sears stockholders he offered some insights on a wide range of topics from recommended reading to accounting regulation.

However, the most interesting nugget probably involves shortselling. Lampert said investors who bet against companies should not be allowed to operate in secret while others have to reveal their holdings.

"It is a mystery as to why those who are owners of publicly traded companies are required to disclose their holdings while those who sell short those very same securities are permitted to keep their positions private," Lampert wrote in the letter on Thursday.

The letter came as Sears posted stronger-than-expected quarterly results after cutting costs, and said it was closing 24 additional stores, sending its shares up as much as 10 percent.

Lampert is the first high-profile hedge fund manager to weigh in on the raging debate over short-selling by pointing to the unfairness of the current process.

Short-selling may be especially close to his heart now that Sears' tumbling stock price has attracted many of these operators even though only a small number of shares are available to short.

Short-sellers borrow shares in the hope of repaying the loan for less after the share price has dropped.

What’s the trade?

The stock is down 65% and without Eddie Lampert there the stock would be a hat size at best, bristles Jeff Macke. (Need he say more?)

And in case you're wondering about the recommended reading, he suggested Austrian economist Friedrich Hayek's books "The Road to Serfdom" and "The Fatal Conceit."

Read More:

> Lampert's Annual Letter Shares Philosophy






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Trader disclosure: On Feb. 26th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (EEM), (MON), (BAC), (FXI), (VIP); Seymour's Firm Owns (COP), (FCX), (RIO); Terranova Owns (OTS), (FXC), (XBI), (BRCM), (WYNN), (INTC), (DELL), (JOYG); Terranova Owns (IBM) Call Spread; Terranova Owns (AMGN) & (AMGN) Puts; Macke Owns (MS), (TM), (SDS), (AAPL); Finerman's Firm Owns (DNA), (MSFT), (RIG); Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY), (USO), (VNO), (BBT); Finerman's Firm Owns (WFC) Preferred, (BAC) Preferred