Peter Caruso City Quotations

We continue to urge investors to switch out of Circuit City and into Best Buy, which we believe is a primary beneficiary of customer migration from the Circuit City remodeling process.

We believe that one of the reasons that CC earnings are imploding is because Best Buy is opening up powerful stores in large metropolitan markets, particularly in New York. We believe capacity will get worse. Best Buy has a large amount of cash and they are ramping up their expansion to try to pre-empt CC's turnaround.

We believe Circuit City will not have a good Christmas or first quarter of next year. We think that there are more shoes to drop in terms of sales with Circuit City, especially when the oil-tax hike takes effect in the first quarter.