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P/E DISCREPANCY HARKS BACK TO CONDITIONS BEFORE '87 CRASH

"Even if the 30 percent corporate earnings gain Wall Street analysts are basing their buy recommendations on materializes, stocks would still be selling at a rather full 15 times earnings," warns Forbes' Steven Ramos. "In the past month, the price-to-expected-earnings ratio for stocks has gone from an 18 percent premium to a 28 percent premium over bonds. The last time there was such a wide discrepancy was just before the crash of 1987."

- The 30.4 percent average annual gain of Enterprise Capital Appreciation Fund since its inception in 1987 "is almost double that of the average equity fund," says Morningstar Mutual Funds (53 W. Jackson Blvd., Chicago, IL 60604). Fortune magazine's 1992 Investors Guide rates ECA first among aggressive growth funds over the past three years. The fund buys stocks with accelerating earnings that are sheltered from the general economy. Recent favorites: Amgen, Costco Wholesale, Home Depot, Imcera Group, Microsoft, Wal-Mart.- One positive effect of the big run-up in the biotech stocks, says United & Babson Investment Report (101 Prescott St., Wellesley Hills, MA 02181), is that it's now easier for the biotechs to raise money and cut better participatory deals with sponsors. The most conservative way to play biotechnology, says United & Babson, is to invest in the large drug firms such as Bristol-Myers Squibb, Johnson & Johnson, Merck and Schering-Plough. But the newsletter recently rated three individual biotech stocks buys: Biogen, Immunex, Repligen.

- If the stock market should head higher, will large-cap or small-cap issues lead the way? One way to hedge your bets on this question is to accumulate some of the better medium-cap companies. Here are the eight "five-star," medium-size growth companies recently rated "buys" by Standard & Poor's Outlook (25 Broadway, New York, NY 10004): Coca-Cola Enterprises, Consolidated Paper, Federal Paper Board, Mark IV Industries, Multimedia, Reader's Digest, Rite Aid, Rohr.

- "One riskless, tax-advantaged and slightly higher-yielding alternative to taxable money funds right now is savings bonds," observes Income & Safety (3471 N. Federal Highway, Fort Lauderdale, FL 33306). "Yes, savings bonds. If held for five years, they now yield a minimum of 6 percent. Currently, their return over holding periods as brief as 6 months (the minimum) is higher than Treasury bills, CDs and money-market funds."

- "The rare-coin market has gone through an honest-to-goodness crash in the past two years," says Profitable Investing (7811 Montrose Road, Potomac, MD 20854). "Since the May 1989 peak, for example, a typical gem uncirculated (MS-65) Morgan silver dollar has plummeted 65 percent. Many high-priced items have tumbled even further. To add insult to injury, some investors are now finding that coins they bought during the last boom weren't properly graded because not all grading services use the same standards."

- The Dow Jones industrials rose 24.4 percent last year. The model portfolios of all the top 10 investment newsletters outperformed this popular index by at least 3-to-1, according to The Hulbert Financial Digest (316 Commerce St., Alexandria, VA 22314). Here are Hulbert's top 10 newsletters for 1991: OTC Insight (up 148.7 percent), BI Research (147.7 percent), Granville Market Letter (125.4 percent), Oberweis Report (112.4 percent), Agbiotech Stock Letter (105.5 percent), Medical Technology Stock Letter (95.2 percent), Hussman Econometrics (94.9 percent), Individual Investor Special Situations (92.0 percent), Chartist (90.3 percent), MPT Review (83.9 percent).

Investor's Notebook is a digest of investment opinion from the world's leading financial advisers. It does not recommend any specific investments, and no endorsement is implied or should be inferred. For more information, contact the individual firms cited.