Tis The Summer of Giving

Gamestop is a retailer that chomps the competition.

Of course, retail has been slaughtered in the markets of late, but some should rally here as Christmas time comes rolling around the bend. I write this now as I see that video sales are expected to be up year over year.

http://www.usatoday.com/life/lifestyle/2008-12-01-video-game-gifts_N.htm

And if one cannot afford a new game then you can buy used ones as well at this retail establishment or if need of cash GME will buy the game back.

GME, according to yahoofinance, is trading about $6 over book value, but this is a growth stock in a deflationary environment, where a cash rich company is king, so I would assume that if GME begins to trade below book value then I would get out of this trade because something is seriously wrong.

My expectation is that, first, it will outperform the SP500, which would imply as the chart shows, a 20% gain. The loss of $6 (going below book value) is around 30%.
So first target is 2/3, 67%, risk/reward.

Caveat on this is that my mind, pumped up with caffeine, is all over the place so may not follow up on it, as the markets are doing some tricks that Cirque de Soleil should take a cue from.