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.

Analyst upgrades:

• Jefferies upgraded shares of Anadarko Petroleum Corporation (NYSE: APC) to Buy from Hold and raised the target to $79 from $52.50 on valuation and believes the company can use its strong cash flow position to acquire assets.
  
• Baird said The Corporate Executive Board Company's (NASDAQ: EXBD) valuation is discounting a miss and that the company is well positioned as an early-cycle story with a new CFO, continued mid-market traction, and likely better than feared 2009 results. The firm upgraded shares to Outperform from Neutral and raised its target to $38 from $41.
  
• Merrill upgraded Novartis AG (ADR) (NYSE: NVS) to Buy from Neutral and Sanofi-Aventis SA (ADR) (NYSE: SNY) and Shire Plc (ADR) (NASDAQ: SHPGY) to Buy from Underperform on valuation and defensive earnings.
• Marshall & Ilsley Corporation (NYSE: MI) was upgraded to Market Perform from Underperform at Keefe Bruyette.
  
• Barclays Plc (ADR) (NYSE: BCS) was raised to Hold from Sell at Citigroup.
  
• Novellus Systems, Inc. (NASDAQ: NVLS) was upgraded at Soleil to Buy from Hold.

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.

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.

Apple (NASDAQ: AAPL) has begun to round up the press for a big news conference next Tuesday. The event will be in London and will probably cover Apple's plans for its iPhone in the UK, France, and Germany.

Apple's PR machine does not know how to do anything small, so it is expected that the company will say that it will "hand a UK sale deal to Spanish Telefonica's O2 UK unit, a German deal to Deutsche Telekom's (NYSE:DT) T-Mobile and a French deal to France Telecom's (NYSE: FTE) Orange."

With the iPhone's price already dropped, sales in Europe can be expected to be strong.

The product, however, has at least two problems as it moves overseas. One is that the phone is currently a 2.5G product while Europe cellular users are, in many cases, already on 3G networks. Apple would need a short time table to get a next-generation product to market.

The other issue with the iPhone is that technology pirates have figured out how to "unlock" the device so that it can work on more than one cellular network. It is too early to say whether this will affect the exclusivity that Apple is seeking from network partners, but it at least raises the question of how easy it will be to force consumers to stay with one provider.

Now it's on to Asia.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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.

MAJOR PAPERS:

• The 19.4B sale of Clear Channel Communications Inc (NYSE: CCU) to Bain Capital and Thomas H. Lee Partners is expected to proceed quickly as major shareholders Highfields Capital Management and Fidelity Investments are expected to agree to a new proposal raising the sale bid by 20 cents to $39.20 a share, reported the Wall Street Journal.
• Last month stent implants in the U.S. fell 15% to 71,200 from April 2006, signaling that they may no longer be a strong growth area for the medical industry, reported the Wall Street Journal.
• A new EU law that would slash the roaming charges for mobile phone calls by Europeans when they are traveling on the continent is expected to cut into the profits of companies including Vodafone Group (NYSE: VOD), France Telecom ADS (NYSE: FTE), and Telefonica SA ADS (NYSE: TEF) , reported the Financial Times.

OTHER PAPERS:

• EMI Group (OTC: EMIPY) has opened its books to rival Warner Music Group (WMG), setting up a four-way bidding war, reported The Business.
• New explorations by PetroChina Company Limited's (NYSE: PTR) parent company, China National Petroleum Corp, have found that the Jidong Nanpu Oilfield in Bohai Bay may have more reserves than previously estimated, reported China Daily.

While domestic phone companies battle for market share, non-US firms are building dominant positions in markets considered by many to offer higher growth potential, such as Latin America. And despite their foreign operations, several of these stocks are traded through ADRs on the New York exchange.

John Christy III, editor of the Forbes International Investment Report is a fan of America Movil (NYSE: AMX), the dominant mobile phone company in Mexico, with operations in a dozen other Latin American countries. The company is controlled by billionaire Carlos Slim Helu, the world's third-richest man (following Bill Gates and Warren Buffett).

Says Christy, "American Movil has had a stellar record of growth and profitability over the past five years. With cellular penetration rates in Latin America hovering in the 40% range (versus 90%+ in Europe), there is a lot more room for growth."

The shares have risen 15% since he first added it to his portfolio two months ago, and he cautions that they might pull back. However, he says, "Use dips as an opportunity to scoop up more shares. AMX is trading at less than 15 times next year's consensus earnings forecast of $2.90. With estimated earnings growth running at a 35%+ clip, AMX still looks extremely attractive."