(MONEY Magazine) – Never mind that the model portfolio of Charles Allmon's Growth Stock Outlook (biweekly, $195 a year; 301-654-5205) has grown 1,234% since June 1973 while the Dow has gained 693%. Or that his Bethesda, Md. firm, which manages $400 million for clients (minimum account: $175,000), has delivered 16 straight up years. Among Wall Street stock peddlers, Allmon, 70, is often put down as an out-of-touch bear who since mid-1986 has refused to retract his gloomy predictions despite the Dow's 1,100-point advance to crack 3000. While the market climbed for five years, Allmon kept as much as 90% of his portfolio in cash and denounced most stocks as perilously overpriced. From time to time, his acrophobia was vindicated -- most notably in crash-marred 1987 and bear-mauled 1990, when he beat the market with gains of 6.3% and 6%, respectively. Those sell-offs seemed to be enough justification for his obstinacy. In a missive fired off to clients as recently as last Feb. 15, he asked: ''Is the market's surge just so much hysterical investor pishposh?'' So imagine the astonishment among Wall Street bulls as word spread in early March that Allmon had quietly enlarged his letter's buy list from seven to 26 companies -- mainly small growth stocks -- and reduced his cash from 90% to 53%. Was the oldest living bear eating crow? ''Hundreds of stunned clients have called to ask the same question,'' he told writer Junius Ellis. Excerpts from our interview: Q. In recent years you've described yourself as neither a bull nor a bear but a chicken. What are you now? A. A chicken who doesn't want to look like a turkey. While this market is pricey, the momentum that's building could push the Dow to perhaps 3600 as early as mid-1992. I'm just trying to scalp a few bucks without having my head handed to me. As soon as my portfolio is up 10% to 15% this year, I'm taking my profits. Q. How does this rally differ from the ones you shunned? A. Our victory in the Middle East war gave a tremendous boost to national confidence. Most economists predict a slow recovery later this year and so-so GNP growth of 1% to 2% in 1992. But I think the recession will end this fall with a boom in housing -- the key component of consumer spending -- kindled by more affordable mortgage rates and home prices. And we could see 4% to 6% growth next year depending on how aggressively the Federal Reserve Board pushes down interest rates. Let's not kid ourselves. Alan Greenspan is the most partisan Fed chairman of the past 40 years. He'll do his part as a Republican to ensure a robust recovery long before President Bush stands for re-election in November 1992. I wouldn't be surprised if the recent 8.3% yield on long-term Treasuries dropped to 7.2% in 12 months. Q. What other trends should investors be focusing on? A. Mounting support in Congress to restore fully deductible IRAs for all workers. Deductible IRAs were available to virtually all of them from 1982 through 1986, when total IRA assets rose tenfold to $277 billion and helped fuel the roaring 1980s. A new flood of money would be unleashed if the Super- IRA becomes law. ((See the story on page 128.)) Bush and House tax czar Dan Rostenkowski have yet to endorse the bill for fear that it could wreck last year's deficit-reduction agreement. But I predict that both will fall in line -- and worry about how to pay for the measure after the election. Q. Given this upbeat outlook, why are you still a chicken? A. New bull markets do not begin with the Dow priced well above its historic multiples of earnings, book values and dividends, as was the case last January. What we're seeing now is the grand finale of the megabull march that stretches back to 1974's big bear-market bottom. Before the music stops, stocks could climb to absurd valuations comparable to their pre-crash peaks in 1987, 1972 and 1929. The blow-off could be as sudden as it is devastating and cut the Dow in half. Q. How are you playing this finale? . A. With the exception of a rank speculation called First Team Sports ((see page 169)), I'm concentrating on proven but low-profile growth stocks that figure to be early beneficiaries of a strong economic recovery. They have little or no debt, brisk profit growth averaging at least 14% a year since 1987, and exceptional returns on equity ((a basic measure of profitability; see the table on page 169)). Yet the stocks are priced well below the market's multiple of projected 1991 earnings, lately 17. Q. What are your favorites? A. Three prosperous companies in otherwise sluggish sectors -- trucking, freight forwarding and office supplies -- that respond quickly to an economic upturn. Arnold Industries, with annual sales of $159 million, is the most efficient trucker in the U.S., while $206 million Intertrans is an international freight forwarder and broker. Many of its customers are in the oilfield services business, which will get a big lift from the rebuilding of Kuwait. And $130 million Ennis Business Forms specializes in supplying the paper shufflers of Main Street American companies. I'm also keen on $2 billion Longs Drug Stores, a 263-outlet chain mostly on the West Coast. The stock has been depressed by a recent -- but surmountable -- earnings stumble caused by weaker consumer spending. The slip was only the second in 53 years of rising profits. We should all be so consistently in the money.

CHART: NOT AVAILABLE CREDIT: Source: Institutional Brokers Estimate System CAPTION: STOCKS EVEN A SKEPTIC COULD LOVE These five stocks are ranked by their price/earnings ratios (P/Es) based on Allmon's projections for current or fiscal year earnings per share (EPS). Ennis and Longs are listed on the Big Board; the rest trade over the counter.