An update on two short positions: GameStop Corp. (NYSE: GME), recommended on May 26, 2009 at a price of $26.00, and Telefonica S.A. (NYSE: TEF), recommended on the same day at a price of $61.11.

GameStop: Hold Short. It's still hard to make the case for growth in high-end / sophisticated games amid a slowdown in consumer spending. The era of the 'frugal consumer' is upon us: basic games are in, pricey games are out. Cover Short on a bounce off $20, $17, $15, or $10. Buy/Stop Loss if you sold shares in this company: $33.

Some contend that shorting stocks is un-American. Hardly. Selling short provides liquidity to the markets, aids in price discovery, and provides an extra check -- some argue the only check -- against ill-conceived business ideas and incompetent executives.

New York Stock Trader Dave Fischer is a short king, and has made most of his money over the past 15 years shorting stocks. His favorite phrase is, "With those fundamentals, that stock can't hang on for long."

Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy/Stop Losses.

"Well managed, dominant firms use downturns to become more powerful -- and that's definitely what Telefonica (NYSE: TEF) is up to," says Roger Conrad in The Utility Forecaster.

"Incorporated in 1924 as a unit of US-based ITT, the Spain-based company now serves 47 million customers in its home country, 150 million in 14 Latin American nations and 45 million elsewhere in Europe.

"Thus far in the recession, diversity and dominance of fast-growing markets has kept Telefonica growing. Overall global customer rolls increased by 15.2% through the third quarter 2008.

Analyst upgrades:

• Citigroup upgraded shares of Ball (NYSE: BLL) to Buy from Hold and raised its target to $45 from $41 as they believe recent capacity closures will be positive for beverage can operating rates.
  
• Deutsche Bank upgraded Rio Tinto (NYSE: RTP) to Buy from Hold on valuation and the company's plans to preserve cash.
• ThinkPanmure upgraded Intel (NASDAQ: INTC) to Accumulate from Sell and raised its target to $17 from $12 citing trough earnings in 2009 and lowered expectations.
• Viacom B (NYSE: VIA.B) was added to Goldman's Conviction Buy List.
  
• Telefonica (NYSE: TEF) was upgraded to Outperform from Neutral at Credit Suisse.
  
• Onyx Pharma (NASDAQ: ONXX) was raised to Overweight from Neutral at JP Morgan.

Analyst downgrades:

The telecom business is definitely not recession-proof, as those that have followed the industry have recently realized, but it is not a field that is going to fade into the horizon any time soon either. Simply put, people need to communicate and the telecom business is poised to continue rolling with the new technology and bringing people what they need. If you see the value of telecom companies and agree that their future is, perhaps not golden, but definitely strong, then an investment in an Exchange Traded Fund (ETF) is an excellent way to invest in the future of the telecom field without placing all of your trust in one specific company.

iShares S&P Global Telecommunications Sector ETF (NYSE: IXP) let's you own shares in some of the most noted and reliable telecom companies by simply purchasing shares of the one ETF. With IXP you'll find your investment basket is loaded with companies such as Amercia Movil, S.A.B. (NYSE: AMX) a fixed and wireless provider in Latin America, AT&T, Inc. (NYSE: T) a telecom provider for customers in the U.S. and worldwide, Verizon Communications (NYSE: VZ) a wireline and domestic wireless provider across the globe, as well as several other highly rated and well known telecom leaders.

iShares charges only a 0.48% fee to maintain IXP using computers rather than money managers. IXP also has typically paid about $1.50 per year in dividends -- IXP is down about (41%) this year so that's about a 4% yield -- and these companies seem to have the cash-generating ability to continue dividends.

Of the 44 stocks in IXP, the top 10 holdings total about 71% of all total assets. Take note of the global exposure you'll get by investing in the future of the telecom industry:

• 17.19%: AT&T INC(NYSE:T)
• 10.61%: VODAFONE GROUP PLC(NYSE:VOD)
• 9.47% : TELEFONICA SA(NYSE:TEF)
• 9.05%: VERIZON COMMUNICATIONS IN(NYSE:VZ)
• 5.01%: CHINA MOBILE LTD(NYSE:CHL)
• 4.94%: FRANCE TELECOM SA(NYSE:FTE)
• 4.57%: DEUTSCHE TELEKOM AG-REG(NYSE:DT)
• 3.98%: NIPPON TELEGRAPH & TELEPHONE(NYSE:NTT)
• 3.21%: TELSTRA CORP LTD (Other OTC:TLS)
• 2.71%: BCE INCNYSE:BCE)

Mitch Tuchman is founder of MarketRiders an investment website that teaches individuals how to be their own investment advisors using ETFs

MOST NOTEWORTHY: Telefonica, Affymax and Hatteras Financial were today's noteworthy initiations:

• Deutsche Bank initiated Telefonica (NYSE: TEF) with a Buy rating and believes concerns of an economic slowdown in Spain are overdone and that company is on track to make 2008 guidance.
  
• Baird assumed coverage of Affymax (NADAQ: AFFY) with an Outperform rating and $25 target. The firm believes the market has discounted the regulatory and commercial prospects of lead compound Hematide, which they believe is a $800M revenue opportunity, and recommends buying shares aggressively in the mid-$20s.
  
• Shares of Hatteras Financial (NYSE: HTS) were started with an Outperform rating and $35 target at Friedman Billings. The firm believes management has the opportunity to stabilize its agency portfolio and generate a return on invested capital of about 20%.

OTHER INITIATIONS:

• Caris assumed OmniVision (NASDAQ: OVTI) with a Buy rating and $15 target.
  
• Pioneer Natural (NYSE: PXD) was initiated at UBS with a Buy rating and $110 target.
  
• UBS also initiated CME Group (NYSE: CME) with a Neutral rating and $430 target.
  
• Allied Capital (NYSE: ALD) was assumed with a Buy rating and $14.40 target at Merrill Lynch.

MOST NOTEWORTHY: Seaspan, Vodafone, Telefonica and 8x8 Inc. were today's noteworthy initiations:

• Jefferies believes shares of Seaspan (NYSE: SSW) are attractively valued at current levels given the company's large modern fleet of containerships and "excellent" earnings and cash flow visibility; shares were initiated with a Buy rating and $33 target.
  
• Vodafone (NYSE: VOD) and Telefonica (NYSE: TEF) were assumed with Outperform ratings at Bernstein, as they believe their mobile growth will be stronger than expected.
  
• Kaufman Bros. believes 8x8 Inc. (NASDAQ: EGHT) is on the cusp of posting sustainable profitability and could be an attractive acquisition candidate. The firm started shares with a Buy rating and $2 target.

OTHER INITIATIONS:

• Goldman initiated Ford (NYSE: F) with a Neutral rating.
  
• Sensient Tech (NYSE: SXT) was started withan Outperform rating and $36 target at Oppenheimer.
  
• Friedman Billings assumed Prudential FInancial (NYSE: PRU) with a Market perform rating and $86 target.

Validea is a fascinating newsletter that assesses stocks based on the known criteria of "legendary" stock investors, such as Warren Buffett and Peter Lynch.

Here, editor John Reese reviews Telefonica (NYSE: TEF) -- a Spain-based telecom firm with operates in Europe and Latin America -- based on the strategy of quantitative analyst James O'Shaughnessy.

"James O'Shaughnessy has noted that 'disciplined implementation of active strategies is the key to performance.' He should know; his study of 44 years of stock market data is one of the most extensive ever of the market.

"The system he devised based on that research produced average back-tested returns of 22% per year for those 44 years. At times like these, it's more important than ever to heed his advice, and keep your emotions in check by focusing on fundamentals.

"Telefonica (NYSE: TEF), based in Madrid, Telefonica is involved in the communications, information, and entertainment arenas in Europe, Africa, and Latin America. The firm has a presence in more than 20 countries and more than 218 million customers.

MOST NOTEWORTHY: Overseas Shipholding, Tenet Healthcare and Luxottica were today's noteworthy upgrades:

• Bear upgraded Overseas Shipholding Group (NYSE: OSG) to Outperform from Peer Perform following its Q4 results, citing seasonal strength.
  
• Tenet Healthcare (NYSE: THC) was upgraded to Hold from Underperform at Jefferies after quarterly operating trends showed signs of stabilization.
  
• Goldman raised Luxottica Group (NYSE: LUX) to Buy from Neutral and added shares to their Conviction Buy List as they find the valuation attractive at current levels.

OTHER UPGRADES:

• UBS raised Telefonica (NYSE: TEF) to Buy from Neutral.
  
• Goldman added El Paso Pipeline Partners (NYSE: EPB) to its Conviction Buy List.
  
• Royal Ahold (OTC: AHONY) was upgraded to Buy from Neutral at Merrill Lynch.

A trio of leading advisors are looking outside the US for opportnity in the telecom sector: Nick Vardy sees potential with Telefonica S.A. (NYSE: TEF), David Fried looks south of the border to Telefonos de Mexico (NYSE: TMX) and Dave Dyer recommends the more diversified Emerging Markets Telecommunications Fund (ASE: ETF).

In his Global Bull Market Alert, Nick Vardy explains, "Spanish telecom group Telefonica S.A. is like a corporate conquistador, exploiting its historical links to expand into Latin America. This new Spanish explorer is reaping rich profits for itself and its shareholders.

"Telefonica's global footprint extends across three continents and 23 countries with a total population of 670 million. This conquistador planted its first flag in Latin America 15 years ago and today is the leading telecom in Brazil, Argentina, Chile and Peru.

"For an organization that is already the fifth-biggest telecom company in the world with close to 207 million customers, Telefonica's profits are still expanding at a breathtaking rate.

"Just recently, Telefonica announced that its third-quarter net profit rose 39% year-on-year. Overall, net profit jumped to €4.02 billion from €2.9 billion a year earlier. Also important to us, Telefonica is a stock that has held up remarkably well despite the recent market jitters, recently hitting a record high. We recommend buying the shares at market."

MAJOR PAPERS:

• The Wall Street Journal reported that Berkshire Hathaway Inc (NYSE: BRK.A) chair Warren Buffett is in a position to help companies like Ambac Financial Group Inc (NYSE: ABK) and MBIA Inc (NYSE: MBI), possibly providing relief amid the credit market turmoil; sources speculate the company could also get into the bond-insurance business.
• Retailer Kohl's Corporation (NYSE: KSS) is today expected to announce an exclusive multi-year active wear licensing partnership with Fila Luxembourg S.a.r.l., a part of Fila Korea, according to the Wall Street Journal.
• According to a senior executive at Telefonica SA (NYSE: TEF), the company's efforts to obtain exclusive control of Vivo have stalled, the Financial Times reported.
• CEOs of CSX Corporation (NYSE: CSX), Union Pacific Corporation (NYSE: UNP) and Burlington Northern Santa Fe Corporation (NYSE: BNI) told the Financial Times that if any of the new four bills to regulate rates, that are currently being debated in congress, becomes law, accelerating investment in U.S. railroads' capacity could come to a halt.

OTHER PAPERS:

• News Corp's (NYSE: NWS.A) Rupert Murdoch said the company plans to replace nearly one million paid subscribers of the online Wall Street Journal with 10-15 million "who wouldn't pay a thing." Murdoch's long-term plan is to penetrate developing markets, The Australian reported.

MOST NOTEWORTHY: Sprint Nextel, Safeway, PharmaNet Development, Millennium Pharmaceutical and Telefonica were today's noteworthy upgrades:

• Wachovia upgraded shares of Sprint Nextel Corporation (NYSE: S) to Outperform from Market Perform as they believe the company is within six months of reaching a sustainable turnaround in subscriber growth and that investor expectations can not get much lower.
• CIBC upgraded shares of Safeway Stores Inc (NYSE: SWY) to Sector Outperformer from Sector Performer after the company's strong quarter in a challenging environment.
• Jefferies raised its rating on PharmaNet Development Group Inc (NASDAQ: PDGI) to Buy from Hold as they believe the company should achieve leverage in margins after executing its turnaround.
• Millennium Pharmaceuticals Inc (NASDAQ: MLNM) was upgraded to Outperform from Neutral at Baird. The firm said expectations for Millennium and Velcade are low and would be buyers for the quarter given the ASH meeting and downstream pipeline visibility.
  
• Telefonica SA (NYSE: TEF) was upgraded to Buy from Hold at Citigroup following the company's earnings growth guidance.

OTHER UPGRADES:

• Centene Corporation (NYSE: CNC) was upgraded to Overweight from Equal Weight at Lehman Brothers.
• UBS upgraded NII Holdings Inc (NASDAQ: NIHD) to Buy from Neutral.
• Goldman Sachs added Knight Capital Group Inc (NASDAQ: NITE) to its Conviction Buy List.
• RBC Capital upgraded Annaly Capital Management (NYSE: NLY) to Outperform from Market Perform.

Two recent news reports suggest Google Inc. (NASDAQ: GOOG) continues laying the foundation for world domination.

The first, from Commsday.com, claims that Google is partnering with other carriers to lay a new multi-terabit communications cable on the floor of the Pacific Ocean, connecting the Americas with the Far East. The "Unity Cable" would compete with another new cable in development by Telekom Maylasia, the Asia America Gateway cable. According to the article, a proprietary cable could provide Google a large cost advantage over competitors such as Yahoo! Inc. (NASDAQ: YHOO), although a Level 3 executive recently expressed a concern that the rapid growth in cable networks might result in a "capacity bubble."

The second report, from The Guardian, suggests that Google is prepared to bid for a portion of the U.K.'s mobile phone radio spectrum if the government follows through on plans to reclaim these frequencies from Vodafone Group PLC (NYSE: VOD) and Telefonica SA's (NYSE: TEF) O2 network. Those who are convinced that Google is planning its own Googaphone will see this, as well as the company's interest in a similar upcoming U.S. frequency auction, as evidence that the phone is part of an overall strategy to dominate the coming ubiquitous wireless internet world.

MAJOR PAPERS:

• Barron's Online's (subscription required) "Weekday Trader" is inclined to take profits in the disk-drive market while others are popping the champagne; specifically in Western Digital Corporation (NYSE: WDC), which Barron's wrote about positively four months ago and has appreciated 29.6%.
• Emerging markets are outperforming their U.S. and European counterparts this year, but investing in some countries -- including Turkey and Hungary -- is still risky, according to the "Heard on the Street" column in today's Wall Street Journal (subscription required).
• The Financial Times (subscription required) reported that Russian oil company Lukoil Holding (OTC: LUKOY), which is 20% owned by ConocoPhillips (NYSE: COP), is planning a $9B European spending spree.

OTHER PAPERS:

• The Los Angeles Times reported that Washington Mutual Inc (NYSE: WM), the largest U.S. savings and loan bank, will close two mortgage divisions, resulting in about 1,000 job cuts.
• Spanish telecommunications company Telefonica SA (NYSE: TEF) said it is in talks with Apple Inc (NASDAQ: AAPL) concerning the right to sell the company's new phone, the iPhone, in Spain, next summer, Telecom Paper (subscription required) reported.

WEBSITES:

• A rumored partnership between Apple and Volkswagen AG (OTC: VLKAY) to develop an "iCar" with iPod connectivity could benefit both companies but is unlikely to yield an actual automobile for three or four years, according to market intelligence firm iSuppli Corp., reported AppleInsider.com.

MAJOR PAPERS:

• According to the Wall Street Journal (subscription required), NYSE Euronext Inc (NYSE: NYX) is investigating the trading of ABN Amro Holdings NV (NYSE: ABN) shares in March when it announced it may sell itself to Barclays plc (NYSE: BCS).
• Barron's (subscription required) "Inside Scoop" column reported that hedge fund ValueAct Capital Partners has boosted its stake in Advanced Medical Optics Inc (NYSE: EYE) to 12.6%, up from 9.9% disclosed at the beginning of June.
• The Financial Times reported that Citigroup Inc (NYSE: C) is not going to reduce its financing of buyouts in the near future, said Citigroup CEO Chuck Prince.
• Spanish telecom company Telefonica SA (NYSE: TEF) has made a EUR3B-plus offer to Portugal Telecom (NYSE: PT) for exclusive control of Vivo Participacoes (NYSE: VIV), reported the Financial Times.

OTHER PAPERS:

• Australian mining company BHP Billiton Limited (NYSE: BHP) has opened talks with private equity firms about a possible $40B takeover of aluminum company Alcoa Inc (NYSE: AA), reported the UK Times.