These are the best of times for Best Buy. The product cycle is finally here, the competitive environment ... is benign and looks to stay that way for the foreseeable future.

At first glance, this seems like a strange deal as investors in Sears Holdings are looking for cash generation, not new investments.

The two weak links in the store are apparel and consumer electronics. One could have had a nice nap in the consumer electronics section given the light traffic. Conversely, appliances were buzzing.

We're looking for expenses that are coming in line and gross margins that are working, and that's what we saw. These results give us more confidence that Sears can continue to improve earnings in 2006.

The stock trades above a level that we would view as appropriate for the current earnings that, absent signals of improvement or takeover, would imply downside.

That comment should calm concerns that the first quarter could be down, and positions Best Buy for solid earnings per share improvements against the second and third quarters.