"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Is there anyone on the planet, with half their brains tied behind their back, that didn't know retail sales were going to be way down in October? Consumers were more worried about their bank collapsing than buying new stuff at the malls. Now that the FDIC has raised the deposit insurance for banks, consumers are more at ease. The consumer was like a deer caught in the headlights of an oncoming car. We saw a similar situation in 2000 when the US presidential election of Bush vs Gore was tied up in court during the all important shopping months of November and December. Deja vu? As the earnings and retail sales numbers are released, executives at many retailers will take this window of opportunity to get the street to lower earnings expectations. Why? Going forward, lowered expectations will be easier to beat. CEO's live for days such as these. Going forward, beating lowered expectations sets the stage for a new round of earnings surprises on the upside which translates into higher stock prices. Take for example Best Buy (BBY). Now that Circuit City has filed for bankruptcy, BBY has a virtual monopoly on the retail electronics business. Yesterday, BBY CEO Brad Anderson said that this “the most difficult climate we’ve ever seen.” You know as well as I do, with technology as advanced as it is, that the executives at the Best Buy headquarters see the daily sales figures. So, if the daily numbers were bad, and I believe they were, why was the company's chairman-director buying 1,682,800 shares at a cost of $42,790,763.00 in the open market? This is a simple game of buy tons of the stock, lower your expectations, beat the expectations over the next 16 quarters, and get rich. As I said above, " Let the Games Begin!" Market Comments DJIA: 8,835.25, up 552.59 S&P 500: 911.29, up 58.99 NASDAQ Composite: 1,596.70, up 97.50 After dropping below 8000 for a brief time, the markets gathered steam to mount a 900 point reversal. Yesterday's retest was successful as hedge funds continued to unwind positions giving bargain hunters an opportunity to buy some great companies at great prices. The NASDAQ fell below its closing lows of October after Intel said that October was bad too. The media wants us to believe that the lights have gone out on Christmas. I wouldn't bet on that. In fact, I told my wife to look and see how much we spent on Christmas in 2007, and double it. How can we do that you may ask? We were tempted by others to get over leveraged as they were. I'm not real good at following the crowd however. We paid off our house several years ago. I don't like to show-off, so financing things just to let people see what we have sounded pretty dumb to me. I had a few pieces of real estate that I sold when I heard people bragging about how many condo deals they were getting into. Now, I'm sitting back looking for a nice vacation home as the rest world tries to de-leverage themselves. I'm in no hurry however since I believe we are in the midst of 10 year bear market for real estate. Like I said a few weeks ago, I believe the big money to be made will be in the stock market over the coming years. Most of my cash is going into stocks. Insiders are jumping in big, and that is usually a sign that we are near an important bottom. Today, the markets will continue to unwind in the morning, and I'll go through my usual routine of searching for bargains and adding to positions.