Like Warren Buffett, Eddie Lampert calls himself a "value investor," meaning he buys into companies whose assets he calculates are worth more than the current trading price. "The idea is that I'm going to pay this price and great things may happen, but they don't have to happen for me to do okay," he says. He typically doesn't short stocks, trade currencies or derivatives, take on substantial leverage, or do any of the fancy stuff that most hedge funds do.
His firm, ESL Investments, employs 20 people, whereas another hedge fund its size (there are just a few) would have hundreds and a busy trading floor.
"We try to stay very focused," Lampert says. He takes large positions in major companies and typically holds them for a long time.