"We add the Consumer Price Index growth rate and the stock market's average P/E ratio for each year to determine if stocks are a bargain," says The Gourgues Report (3155 Roswell Road, Atlanta, Ga. 30305). "Historically, the sum of these two figures never deviates from 18 for very long. The average annual high since 1950 has been around 23. In recent months this figure has rocketed into the mid-30s."

- "We own 50 companies in which we really believe," says Composite Norwest 50 Fund's Randy Yoakum, explaining his stubborn buy-and-hold strategy. Yoakum's faithfulness, plus his equally rigid insistence on high cash flow, substantial return on equity, understandable businesses, big management positions and low debt, has allowed Norwest to outperform 70 percent of its growth fund rivals since 1987 despite its mandate to invest only in Northwest companies. Recent favorites: Microsoft, Nike, Boeing, Albertsons, Costco Wholesale, Fred Meijer, Expediters International, Advanced Technology Labs, Space Labs Medical.- The recent weakness in food stocks is a buying opportunity, says Dow Theory Forecasts (7412 Calumet Ave., Hammond, Ind. 46325). "Food producers have excelled at keeping costs down. Vast opportunities exist for the major players overseas. And the stocks have been models of price consistency over the past 20 years." D.T.F.'s food favorites: Dial, Dole, Gerber Products, Heinz, Kellogg, PepsiCo, Philip Morris, Procter & Gamble.

- A reduction in the number of shares outstanding helps a stock in two ways. It suggests that the issuing company considers the stock enough of a bargain to be buying it back. And it reduces the supply of shares. Forbes recently listed eight stocks with substantial reductions in the numbers of shares outstanding over the past five years, and the last four quarters: Ennis Business Forms, General Re, Loews, Polaroid, Ralston-Purina, Rockwell International, Tandy, Torchmark.

- Junk bonds have had two straight great years. But it may be a bit late to get in on the party, says Martin Firdson, Merrill Lynch's director of high yield securities. "Given a generally stable interest rate environment, I would not expect high-yield bonds to fluctuate by more than 50 to 75 basis points in the upcoming months."

- "Investing now in foreign short-term deposits may be a big mistake," suggests economic consultant A. Gary Shilling. "While European interest rates may exceed U.S. yields for a while longer, a climbing dollar could easily offset that advantage. What about investing in foreign deposits and hedging the currency risks? That's a non-starter for most investors. The cost of the hedge usually exactly offsets the interest spread. Currency markets are surprisingly efficient."

- Seventeen investment newsletters have outperformed the general market since the crash of October 1987, reports Hulbert Financial Digest (316 Commerce St., Alexandria, Va. 22314). Of those, a surprising nine also outperformed the market during that difficult month. Here they are, along with their total gains over the past five years: Investment Quality Trends (93.0 percent), The Chartist (90.7 percent), Zweig Performance Ratings Report (78.5 percent), Systems and Forecasts (78.3 percent), Zweig Forecast (71.5 percent), Switch Fund Timing (69.9 percent), The Big Picture (64.4 percent), Mutual Fund Forecaster (53.5 percent), InvesTech Mutual Fund Adviser (46.1 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.

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