2. Sears Tears

Gosh darn it! We spent so much time this year focusing on Bill Ackman's undoing of J.C. Penney ( JCP) that we totally forgot about another hedge fund manager's ruination of another American retail icon.

Forgive us, Eddie Lampert. Your destruction of Sears ( SHLD) once again has our undivided attention.

Shares of the struggling department store spiked 7% Tuesday on news that the company will split off its Lands' End clothing and Sears Auto Center businesses. The bounce in Sears stock -- more than half of which it gave back the following day -- was widely attributed to the fact that it soothed Wall Street's worries about the company's liquidity, as opposed to any affirmation of Lampert's operating strategy.

Sears stock has outperformed the market so far in 2013 primarily due to Lampert's financial engineering squeezing the hordes of shortsellers trapped in the stock. Sears has seen declining sales since 2005 when Lampert merged K-Mart and Sears in an $11 billion deal. Lampert was cheered at the time as a visionary who saw Sears as a real estate play as opposed to a retailer.

Unfortunately, the reclusive Lampert head-faked Wall Street and hung onto the company instead of selling it before the property bubble got punctured. In the latest installment of bad news at the 120-year old company, the company said this week it expects a net loss of between $532 million and $582 million in its third quarter, wider than last year's $498 million loss.

Lampert latest purge of Sears assets, therefore, is less than surprising even if we have been ignoring the company of late. In case you may have forgotten, Sears already spun off its Orchard Supply Hardware Stores unit in December 2011, and last year it annonced its intention to cast off Sears Hometown and Outlet businesses.

To sum it up, Lampert is selling off the parts but Sears underlying business remains less than whole. At least Ackman and his hand-picked CEO Ron Johnson attempted to invigorate Penney's stores by jazzing them up with brand names like Martha Stewart and Joe Fresh. Johnson may have totally alienated Penney's core customers with his haughty ways and insane pricing strategies, yet at least he tried to give them a reason to come to his stores. We'll give him credit for that. Lampert, on the other hand, never put much money or thought into the Sears brand. The stores are rotting away as a result of underinvestment.

To be honest, we still have no clear idea what compelled him to get into the thankless, low margin world of retail in the first place. If it's not the real estate keeping holding Eddie's interest, then what on earth is it?

Frankly, we'd really like to know before the last asset is sold off and the Sears name joins Gimbels, Bambergers, Alexanders, Abraham & Strauss and a host of others in department store heaven.

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