"We expect the `normal' 2 1/2-year upwave in the 4-to-4 1/2-year business cycle to begin sometime this quarter," says The Nicholson Group (P.O. Box 56-1065, Miami, Fla. 33256). "That upwave, based on history, will double and triple the value of many stocks. This market could surprise lots of people, just as it did in the last third of 1982 when it rose more than 30 percent while a recession was actually deepening."
- Dodge & Cox Stock Fund is one of the fund industry's best-kept secrets. Despite its glittering 16.3 percent average annual appreciation over the past decade, Dodge & Cox is sold in only 17 states and isn't marketed very aggressively anywhere. The fund's low-key approach extends to its portfolio, too. It buys stocks with strong balance sheets and market leadership positions, then holds on to them for an average of six years. Recent favorites: IBM, Procter & Gamble, Caterpillar, General Re, Dayton-Hudson, Deere, Norwest, SCE.- The Dutch stock market is Europe's cheapest. Its current price-earnings ratio is 40 percent lower than the U.S.' P.E. Robeco, Europe's largest non-bank fund management company, has invested 16 percent of its $23 billion assets in low-P.E., high-yield stocks on the Amsterdam exchange. Among its favorites: ABN Amro Holdings, Aegon, Akzo, AMEV, Nationale-Nederlanden, Philips, Royal Dutch Shell, Stad Rotterdam, Unilever, Volmac Software Group.
- Corporate profits fell 4.2 percent last year. But CEO compensation actually rose an average 8 percent. That's why Great Lakes Review prefers stocks whose managers are heavily committed to their own shares. Their motivation is quite simple - the bottom line. As earnings rise, so do their share prices. "These managements are rewarded or penalized as their shareholders are. Stocks dominated by a single family outperformed both bull and bear markets over the past 20 years." G.L.R.'s favorite closely held stocks: Arbor Drugs, Cintas, Hillenbrand, Kimball International, Medstat Systems, Smucker, Stryker, Tootsie Roll.
- "The fear of holding all the paper money being created will soon come to the surface and precious metals will explode upward in price," predicts Heim Investment letter (P.O. Box 19435, Portland, Ore. 92719). "It makes no sense for silver, especially, to be cheaper than it was 15 years ago. Below $5 it is the investment opportunity of the century."
- "Because long-term bonds usually offer higher yields than intermediate- or short-term issues, most investors assume they also provide higher total returns," notes AAII Journal (625 N. Michigan Ave. , Chicago, Ill. 60611). "In fact, intermediate bonds have produced slightly higher total returns over the past 15 years, and considerably higher returns over the past 25-year and 50-year time frames. They've also done so with considerably less volatility than long-term issues."
- If interest rates keep falling, utility stocks should continue to benefit. The easiest way to achieve diversification with utility stocks is through a utility fund. "But not all utility funds are equally conservative," warns Changing Times. "Some may own volatile cellular phone companies. Others may be filled with troubled electric utilities that pay small dividends or none at all. Check prospectuses and annual reports to see whether these funds fit your comfort zones for risk."