DAVE HARRIS: This is podcast # 29. It is Monday Jan 8th 2007. I'm a long term private investor managing a diversified portfolio of stocks.

What I'm making out of the market right now is a little confusion among investors regarding what's good and what's bad. Of course we're on constant FED watch these days. Any economic data pointing toward growth that's too strong means fear that the Fed will hike rates. Let's take the latest news from the Labor Department. We know there's strength in job growth for December-167,000 new jobs added, and unemployment has stayed pretty low-unemployment is at 4.5%. Hourly earnings up 1/2 of a percent from the month before. Unfortunately the market is taking this as a sign the fed will react with higher interest rates. My view is that we need to take the positive employment and wage news from last week and see this as good news. Not as a threat of inflation. I think it shows that the Fed is succeeding in letting the economy grow at a steady, positive pace. The place to invest now is where people spend their money. In this show I want to focus a little on the same store sales numbers we had from a slew of stores recently. Because I see some good investment opportunities here.

In electronics there was good news last week from Best Buy BBY. The results beat expectations with same-store sales up 7%. Circuit City had nice results too with over a 4% rise in same store sales. The symbol is CC. But I recommend Best Buy over Circuit City. BBY is bigger and I really like their fiscal '07 guidance. Plus I do see the stock at around $60 p/s. I have a buy rating on the stock now at $49.72 per share.

Target the discount variety store, symbol TGT, is in my opinion an even better investment if you want to spread your wings out a little more. They also sell electronics and certainly make it competitive for the likes of Best Buy. But as most of us know they sell everything from apparel to toys, home furnishings and accessories. I thought the company had nice results with an over 4% rise in same store sales-thanks in large part to the sales of electronics. I think target is on the way to $70 p/s. So I would BUY TGT now at $57.37 per share.

I also like Wal-Mart (WMT). They had a 1.6% rise in same store sales which beat expectations. Good showing for the store's electronics and food. I suggest you BUY the stock at $47 p/s. I think it's headed to 60 dollars.

A few stocks to avoid now. I have a SELL rating on Gap (GPS). They had an 8% decline in same store sales. And the Old Navy and Banana Republic divisions weren't that hot either. They also lowered their Full Year earnings forecast. The company's own CEO even said he was disappointed in holiday sales and performance for the year. Limited Brands (LTD) and Hot Topic (HOTT) both had disappointing results. Jewelry store Zale (ZLC) lowered their outlook for the second quarter and had poor holiday numbers. I suggest you stay away from those stocks and buy the winners like Target, Best Buy, and Wal-Mart.

Now to a new feature on the podcast.

FEMALE ANNOUNCER: And now, here's Dave's stock pick of the week.

DAVE HARRIS:My stock pick is Walgreen's. WAG is the symbol. They had a same store sales gain of almost 8%. CVS also had nice results but I would still buy Walgreen's instead of CVS. You won't go wrong having Walgreen's in your portfolio. They are simply the best at what they do-selling Drugs and Merchandise. Walgreen's is a buy now at $45.46 per share. The stock is going to $55.Again, the symbol is WAG.

Some economic data to keep your eye on this week includes weekly crude inventory this Wednesday. Oil significantly down lately because of the warmer than expected weather. News on weekly jobless claims is this Thursday. Import and export prices are due Friday from the Commerce Department as well as business sales and inventory reports.

It’s a positive vibe on Wall Street today. Dow up over 22 points to 12,420. The Naz gaining more than 8 at 2,442. The broader S&P displays about a 2 point gain at 1,412.

And that's all for this podcast of Dave On Stocks. I'm Dave Harris. I'll be back soon with another show. Thanks for listening. Write me at the "contact us" link on this page. My website is www.daveonstocks.com. This is Dave On Stocks!