DAVE HARRIS: And welcome to podcast # 32. This is for Friday January 19th 2007. I'm a long term private investor with a diversified portfolio of stocks.

Let's get right into some notable earnings we had throughout the week. Overall the news from Apple (AAPL) was great even though they did guide lower than expected for the 2^nd quarter. It's because of slightly lower gross margins and software sales expected before the company's upgrade to the MAC in the spring. The 2^nd quarter revenue is expected between 4.8-4.9 billion vs. the 5.22 billion. EPS pegged at .54-.56 cents compared to expectations of .60 cents. Now for the fiscal 1^st quarter, the company beat Wall Street's expectations. Revenue was up 24%. Earnings were up a whopping 78% on Mac computers and Ipod sales for the holliday. I still recommend you buy the stock. I think it's going to at least 105 dollars per share. This company is a leader in the business. And don't forget about the 10 million I-Phones Apple expects to sell in 2008. This is the device you can use to go in the internet, call someone, send messages, or watch a video and play music. Also don't worry about the stock options because, like I mentioned in podcast 31, Steve Jobs and other CURRENT managers have been cleared of any wrongdoing. AAPL is a buy here at around 90 p/s. Shares are trading lower since the earnings. I think you can attribute that to the NASDAQ which took a hit yesterday. I recommend buying AAPL shares and take advantage of this pullback in the stock. Again, I think it's going to 105 dollars.

While we're on Tech, Intel (INTC) said 4^th quarter profit fell almost 40%. It's the price cuts to compete with AMD that effected earnings. Still these results beat expectations by a penny a share. EPS at .26 cents vs. .25 cents estimated. Although the sales fell 5%, the company beat expectations in that area with 9.7 billion in sales. But the profit margin guidance for 2007 was a disappointment. Gross Margin tells you how profitable a company is. It takes into account the costs for producing the product. Intel's gross margin for 2007 is guided at about 50%. It used to be more around 60%. I do like the revenue guidance for the fist quarter-around 8-9 billion-that's in line with expectations. That's why I suggest you buy the stock here at a little over 20 p/s. I think it's going to about 25. I think the market will continue to be competitive. But I think INTC is a BUY.

Brokerage Merrill Lynch, symbol MER, came in with better than expected 4^th quarter record profit-the best in history up 45% to over 7 billion. Global stock markets development and successful acquisitions like Black Rock Inc. and First Franklin Financial Corp. I think the stock is going over 100 a share.

Some news from the banks now: JP Morgan said 4Q earnings went up 68% from growth in investment banking. Results beat expectations. EPS 1.09 vs. estimates of .95 cents. Revenue was 19% higher and also beat estimates. This was record revenue and income for the company. I like JPM here at around $48 per share. The stock should go into the mid 50's. And Wells Fargo (WFC) had great results. Revenue was better than expected with an 11% increase-that was a record. The 4^th quarter came in 13% higher-in line with views. Strong areas were in retail mortgages, home equity and small business lending and internet banking growth. Buy yourself some Wells Fargo at about $36 per share now. I think it will go to 40.

Ameritrade, the brokerage, beat expectations in the fiscal 1^st quarter. AMTD is the symbol. I think the stock is selling at a good price now at about $17.50 per share. It's headed to over 20 dollars in my opinion.

NCR, the information services tech company, expects to report a strong 4^th quarter Jan 25^th and gave a raised earnings outlook for 2006. I say HOLD the stock. I wouldn't buy shares now. I think this is as high as it gets for a while at around 44-45 p/s.

There's pretty encouraging economic data out lately on inflation. According to the CPI numbers reported by the labor department for all of 2006, there was only a 2.5% rise for the year. We haven't seen a showing like that since 2003. This was unexpected because prices were half of a percent higher last month and gas prices briefly bounced back up. But that was then and prices will be at significant lows since the price of oil has taken a dive these days. The oil of course is related to the price of gasoline. So I think this news should shine a positive light on the market and please the Fed because it lowers the threat of inflation and make it less likely they're going to hike rates. Unemployment benefits numbers look pretty good here too with only 290,000 laid off workers filing claims. This reflects the idea that a slowdown in housing hasn't been a huge impact on employment. I expect housing to continue to slow well into this year. But I also don’t think it'll have a major effect on consumer spending or unemployment numbers. In fact, we actually had some reassuring housing data from the Commerce department that new home construction rose by 4 and a half percent last month. I still don't think housing has bottomed yet though. The latest PPI numbers for December showed an increase of .9% and was higher than expected. Core PPI (that excludes food and energy) came in higher than expectations. This worried the market that inflation pressures may be too much for the fed to handle and cause them to want to rise rates. I don’t see it that way. The latest December PPI reading was actually slower than the month before. The Fed's Beige book, that's a read on regional economic conditions, indicated that the economy is slowing down at a steady pace. No surprise there really in my opinion. That's basically what a lot of Fed officials have been saying for months now. The number on December capacity utilization was in line and Industrial production for last month was much better than expected with some real strength in mining and manufacturing in play. Later this morning it's the University of Michigan's preliminary consumer sentiment reading for January.

That's all for today's podcast of Dave On Stocks. I'm Dave Harris. Write me at the "contact us" link on this page with any questions or comments. The website is www.daveonstocks.com. Thanks for listening. This is Dave On Stocks!