Since the stock market lows of April 1994, the major New York Stock Exchange firms have been net sellers of more than 300 million shares, reports ProFiles newsletter (918 N.E. 16th Ave., Gainesville, FL 32601). "The big professional money crowd could be wrong in selling all that stock, but we wouldn't bet against them. This particular statistic raises the flag of caution."

- Vista Capital Growth Fund, which has returned an average 16.6 percent annually to its investors since its 1987 inception, has also finished in the top half of the growth-fund objective every year except 1990. It's done this by focusing on small and midsize companies that seem cheap relative to their cash flows or dividends and also seem capable of positive earnings surprises. Recent examples: Sunamerica, Green Tree Financial, GATX, NWNL, Airborne Freight, Caldor.- Mergers are sweeping the banking industry. Wall Street Bargains newsletter (1101 King St., Alexandria, VA 22314) recently identified three prime takeover candidates. All have small asset bases, strong earnings growth potential, low levels of nonperforming loans and high equity to total assets. All also recently traded at P/E ratios below their earnings growth rates and market averages. The trio: Great Bay Bankshares, Interwest Savings Bank, Vallicorp Holdings.

- The dollar's fall against other major currencies will help a lot of domestic stocks, observes The Retirement Letter (7811 Montrose Road, Potomac, MD 20854). "It will help U.S. exporters because foreigners can now buy U.S. goods cheaper. Our favorite beneficiaries: AT&T and Merck. It will help manufacturers of goods that are now cheaper here than their imported competition. Our favorite beneficiaries: Crompton & Knowles and DuPont. And it will help defensive growth companies that can prosper even amid higher inflation and interest rates. Our favorite: Colombia/HCA Health-care."

- Most investors put too much emphasis on their ability to predict interest rate movements when choosing municipal bonds, says Michael Niedermeyer, chairman of the Fixed-Income Strategy Committee of Wells Fargo Bank. "More important in selecting municipals is the ability to predict improvement or deterioration in credit quality, and avoiding issues susceptible to recessions or the imprudent fiscal habits of municipal governments. Credit problems are the major source of municipal bond deterioration."

- "We expect emerging stock markets such as Mexico and Southeast Asia to provide superior returns well into 1995," says Frank Cappiello's Closed-End Fund Digest (1224 Coast Village Circle, Suite 11, Santa Barbara, CA 93108). "These results will be fueled by a continuing high level of privatization of state-owned companies and a rapidly expanding middle class which is a key factor in high economic growth. Our favorite emerging market funds are G.T. Global Developing Markets and Morgan Stanley India Fund."

- "Don't count on Chinese buying or Russian economic renewal to buoy gold prices," warns David James of Richardson Greenshields (1 Lombard Place, Winnipeg, Manitoba, Canada, R3B 0Y2). "There's no shortage of paper gold (it's virtually open-ended) and certainly no shortage of physical gold. Measured against apparent demand, mine production and scrap gold supply to the market may indeed have occasional shortfalls, but the world's gold inventory in various forms is still fairly ominous. We continue to discount the importance of the physical gold market to the metal's pricing structure."

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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