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STOCK PRICES MAY BE NUDGED HIGHER BY THE RESERVE FUNDS OF INDIVIDUALS

Individual investors still have lots of money in reserve to drive stock prices higher, according to Bradlee Perry of the Babson Group. "In 1968, individuals had 45 percent of their financial assets in stocks. Since then the proportion has declined sharply and continuously. Now it is only 20.5 percent, after hitting a low of 18 percent in 1990. This is quite contrary to the popular view that individuals are overextended in equities."

- The key to global value investing is to "be very patient, and willing to look stupid for months at a time," says Jean-Marie Eveillard, whose Sogen International Fund has risen a very intelligent 17.9 percent annually on average over the past decade. Eveillard, who puts not losing money ahead of making it, concentrates on stocks that are underpriced relative to earnings, book value and free cash flow, and exits overheated markets quickly. Recent favorites: Bank for International Settlement, Burlington Resources, Hancock Fabrics, Bayer, Safra Republic, Coors.- Wall Street continues to paint a gloomy picture for the oil industry, reports Better Investing magazine (1515 E. Eleven Mile Road, Royal Oak, Mich. 48067). "But oil prices seem headed higher. Bolstered by the underlying value of their assets and resources, and their financial strength and quality, major integrated oil companies have taken steps to improve profitability and build shareholder value." Better Investing's favorite "undervalued oil stocks": Amoco, Atlantic-Richfield, Chevron.

- Despite the fact that both inflation and interest rates seem under control, "and stocks can support higher valuations," investors need to avoid overvalued stocks, cautions Dow Theory Forecasts (7412 Calumet Ave., Hammond, Ind. 46324). "Don't indiscriminately sell issues with high P.E. ratios, but make sure such stocks have above-average profit prospects." D.T.F. recently recommended four "quality stocks with below-average P.E. ratios and above-average yields": American Brands, Hanson PLC, J.P. Morgan, Sprint.

- Adjustable-rate mortgage funds (ARMs) offer yields that are about 1.5 percent to 2.5 percent higher than the average taxable money fund's, notes Donoghue's Moneyletter (290 Eliot St., Box 91004, Ashland, Mass. 01721). "These yields are below those of the short-term bond funds in our portfolio. But at the same time, if interest rates were to rise one percentage point, the net asset value of an ARM fund would drop just 1.5 percent, vs. 4 percent for a short-term bond fund."

- This year's shortfall in silver production, the difference between supply and demand, will rise from 40 million ounces to 60 million ounces, according to Arthur Brown, chairman of the Silver Institute. "The price of silver would have to double from its present level before a significant production increase or additional reserves reach the market. Easily available reserves are just not that high."

- Farmland prices, which flew high in the early '80s before falling to earth, still remain 17 percent below peak levels. Yet investment interest in farmland is building. Morgan Stanley considers it one of the three most attractive asset classes it follows (along with U.S. small growth and technology stocks). And AgriVest's James McCandless agrees. "One can sense substantial institutional-investor interest building. They're at the stage with farmland that they were in the mid-'70s with foreign stocks and commercial real estate."

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.