Update

With oil tanking, there is a good chance that the market will fall with it, in my view. As for today, I am flat - no lose no gain. I am overly short, so I am hoping for a few down ticks so I can blow out of this short exposure. As for short exposure, I am long TWM, SDS, QID, and BGZ. For common stocks, I am short AN. As for my thesis on Auto Nation, I believe the stock is priced in at these levels. From my research, I see that 55% of their revenues are from new car sales, which are not great (unless they are selling 100% Fords) and their customer concentration comes from two states...any guesses on those two states? I will tell you, CA and FL, haha. I believe CA represented nearly 20%+ of all of the new vehicle sales last year and we all know what they state is going through -- utter hell. Credit has loosed; however, it is difficult to obtain car loans and I believe many people will hold on to their savings and drive exisiting cars longer. As for the bull side, they have done a lot to get into the repair side of the biz. In addition, the stock is HEAVILY shorts, with about 24% of the float shorted. Therefore, I will more than likely cover ahead of earnings on Friday because a "touch" of good news can send this stock up 15%+. However, if numbers are terrible, the stock will get back to $15 or $16. As for longs, I should have bought MSFT south of $23 the other day but was trigger shy. I will look to add longs on dips and I believe there are some upside related to homebuilding cases, particularly in Home Depot (HD) and Lowe's (LOW). I am long Lowe's in one of my account from a while back via $19 purchase and will build more in time. The fair value of both of these retailers is higher than the market prices in my view but we need a sure bottom in housing. The housing data was good yesterday but most of the sales were depressed properties, foreclosuers, etc...not "pure" family buying, from my interpretations. In addition, there are alot of Alt-A arms about to be reset in the next 6 months, so I would be cautcious of this, as well as the commercial real estate downturn that is beginning to weaken. GNK reports after the bell today. I am long in size but I am concered about the firm's operating costs. I believe they will beat EPS but I am more concerned about their cost cutting measure. If they reduce costs and increase operating margins, I believe that stock is worth another $4-8 points. If not, we will probably revisit low $20s. As for EXM, they have tons of exposure to spot freight rates and will do good, but it's had a 50% move in 2 weeks, so traders might flee. I might take a position in DRYS today. I believe the company has had the potential to generate great earnings power but I am concerned about a few things. As you know, I research the sector heavily and on July 9, DRYS repurchased 25% of the remaining interest in Ocean Rig. The price is good - 2 rigs for $330 million, where in 2008 they paid $800 million a piece! However, the payment is the problem. They put $50m down and financed $280m through preferred shares w/ 6.5% yields. If the stock held or rises above $6.80 (which is has) all pref shares are converted to common shares, which diluates shareholders and ulimately the share price. So, anotherwards, this could hurt any EPS surprises to the upside...but then again, this stock was $120 a share last year. I believe GNK remains the best with it's agreements but DRYS might be a shot if we get it below $6.