(MONEY Magazine) – The goal of doubling your money in 36 short months may seem a tad audacious -- best suited to Las Vegas types whose idea of diversification is hitting the craps, roulette and blackjack tables before heading off to hear Wayne Newton sing his classic rendition of ''Danke Schoen.'' But the target isn't unreachable. Investments that offer the potential for maximum gains don't have to be gambles; they can be stocks and mutual funds that are already so cheap that their downside is limited. In a best-case scenario, you could get your double; if not, you should at least get solid performance. Limited downside is especially important now that the Dow is close to its all-time high of 3035, and many experts think stocks in general are a bit overvalued. Even the most conservative investors, though, should consider setting aside part of their portfolios -- say, 10% or so -- for potential doubles. With the recession apparently at an end, even a modest recovery could send depressed shares soaring. So you could call our 15 picks double-or-something choices -- just the sort of investments that might appeal to Warren Buffett, the renowned investor who's made a career of spotting undervalued stocks that roll on to mammoth gains. (For one MONEY staffer's attempts to find practical ways small investors can emulate Buffett's stock-picking wizardry, see ''Warren and Me'' on page 70.) To find such investments, MONEY interviewed two dozen stock analysts, money managers and mutual fund experts. Before we get to their 15 picks, though, let's consider exactly what a three-year double requires. It's quite hard for a stock to gain 100% based on earnings growth alone. Profits would have to rise at an annual pace of 26%, nearly twice the average rate for blue chips. If, however, a stock's price/earnings ratio increases at the same time that its earnings are growing, you're in business. The stock of a company whose earnings per share are bounding along at a healthy 15% annual rate, for ; example, would rise 52% over three years. But if the stock's P/E also climbed from, say, 15 to 20, you'll reach the 100% mark. You can also get your double from a stock selling at a sizable discount to the value of the company's assets. A stock that normally trades at 150% of book value but has fallen out of favor with investors might sell at just 75% of book. If the company regains its usual premium, you'll be up 100%. Though low P/E and low price-to-book ratios are the two most common benchmarks for undervalued stocks, there are others. Some investors seek out stocks selling at prices that are abnormally low relative to the sales or cash that the companies generate each year. But whatever measures you use, the benefits of buying cheap are the same. ''If you can get a company at a discount to its real value,'' says David Katz, president of Matrix Asset Advisors, an investment advisory firm that concentrates on undervalued shares, ''you increase your potential gain -- and limit your downside risk.'' Here then are five types of investments -- a total of 15 specific picks in all -- that offer a good shot at doubling your money. We begin with mutual funds, the best choice for investors with portfolios of $20,000 or less and the most sensible way for small investors to hold foreign stocks. -- SMALL-COMPANY FUNDS Scoring a double in a diversified mutual fund is extremely difficult, but you'll improve your chances of pulling it off by sticking to funds that buy rapidly growing small companies selling at a deep discount to their asset values or at modest P/E ratios. Many small companies could increase their profits by as much as 20% a year during the next few years. Yet the average small-company stock is selling at or below the market P/E, rather than 40% or more above the market, as is the norm. Here are three favorite no-load funds of Don Phillips, editor of the Chicago newsletter Mutual Fund Values, which monitors the performance of 2,000 funds: Pennsylvania Mutual. Portfolio managers Charles Royce and Tom Ebright have practically made a religion of scooping up the shares of companies selling at about half their business value -- what they'd be worth to someone buying the entire enterprise. This strict value approach has given Pennsylvania Mutual (800-221-4268) a unique niche among funds that focus on small- capitalization stocks. The fund can soar to spectacular gains -- it jumped 40.5% in 1983 -- yet it has less day-to-day volatility than 94% of all small- company funds. GIT Equity-Special Growth. Rather than concentrating on business values, GIT Equity-Special Growth (800-336-3063) homes in on small companies with earnings increasing by more than 20% a year, very little debt, and P/E ratios close to that of the S&P 500, currently 18. Fund manager Richard Carney avoids cyclical and technology stocks -- their profits yo-yo too much for his taste. Instead he focuses on companies with market niches that allow them to generate earnings growth in both good and bad economic times. This fund is less volatile than 88% of all small-company funds yet is capable of gains such as its 47% total return in 1985. Nicholas Limited Edition. Just like GIT, portfolio manager Albert Nicholas seeks out small companies that have earnings growing 20% or more a year but are selling near the market's average P/E. And while Nicholas Limited Edition (414-272-6133) is capable of whipping the S&P 500 -- its 27% return in 1988 beat the S&P by 11 percentage points -- it also held up well in 1990's down market. -- INTERNATIONAL FUNDS Among international funds, closed-end funds specializing in the stocks of a single country have the best chance to double. Since they are traded on an exchange like a stock -- rather than sold directly to investors at their net asset value -- closed-end funds can zoom to prices well above their underlying value when investors turn bullish on a particular country. Here are top picks from two fund analysts:

Brazil Fund. The Brazilian stock market is one of the cheapest. And Brazil Fund (recently traded on the New York Stock Exchange at $14.50) sells for 11% more than its net asset value -- a moderate premium considering that the fund has commanded a 21% premium within the past year. Despite a rise of more than 150% in Brazilian stocks already this year, the market is still selling at only 60% of book value -- compared with twice book for the Chilean and Mexican markets. ''You're buying in at the second- or third-level basement,'' says Michael Porter, a closed-end fund analyst at the brokerage firm Smith Barney. ''All you need for a double is to get up to the ground floor.'' Under President Fernando Collor de Mello, Brazil has begun moving toward solutions to its economic problems. Though still high by U.S. standards, Brazil's current inflation rate of 5% to 20% a month is a big improvement over last year's 80% a month. And as Brazil privatizes government-owned businesses, Porter predicts that the amount of money invested by foreigners in Brazil's stock market could increase by 40% to $750 million within the next year. These factors could push the Brazilian market's price-to-book-value ratio closer to that of Chile. If half the gap closes within three years, the fund would more than double. Porter cautions, though, that any bad news about the country's economic progress could easily knock it back 10% to 20% in the short term. ''After all, this ain't no Switzerland,'' he says. Swiss Helvetia Fund. Speaking of Switzerland, this closed-end offers one of the best ways to profit from both the rebuilding of Eastern Europe and the economic integration of Western Europe. And unlike another play on both halves of Europe -- the Germany Fund, which sells at an 8% premium -- Swiss Helvetia (NYSE, $12) sells at a 4% discount. Value Line closed-end fund analyst Norman Tepper likes the fund because it focuses on large Swiss companies -- Nestle and drugmaker Roche Holding alone make up nearly 25% of its assets. Such companies are likely to enjoy strong growth as they expand into Eastern Europe. In addition, the fund holds about 40% of its assets in registered shares. Normally available only to Swiss citizens, these shares sell at a discount to the so-called bearer shares that foreigners buy. But Tepper expects Swiss companies will increasingly allow foreigners to purchase registered shares, providing a bonus to investors who bought them at a discount. Over the next three years, Tepper projects that the fund will return 20% to 30% annually. First Australia Fund. With the Australian economy coming out of its worst recession in 50 years, Value Line's Tepper sees the First Australia Fund (American Stock Exchange, $8.25) as a way to ride the rebound. ''Stocks are still down 75% since the 1987 crash,'' he says, ''but it looks like the turnaround is just about to begin.'' Inflation has fallen from a lofty 24% in 1988 to 4.9% recently. That should help keep the Australian dollar fairly stable vs. the greenback and prevent currency fluctuations from eroding U.S. investors' profits. As long as demand for the country's exports of natural resources such as gold, copper and steel continues to pull Australia out of its economic slump, Tepper believes the fund could provide a total return of as much as 23% annually, even if it continues to trade at its current 14% discount to net asset value. -- COMPUTER STOCKS A sales-dampening recession and competition that has shaved profit margins thinner than a silicon chip have taken big bites out of the prices of most computer stocks. This carnage has created extraordinary opportunities for investors to scoop up shares of the largest and most powerful companies in the industry. Apple Computer. In a way, Apple Computer's sagging stock price -- it recently sold over the counter for $45.50, or 37% below its all-time high of $73 earlier this year -- is a victim of the company's own success. Last fall, in a move to increase its market share, the company unveiled a new low-priced Macintosh computer. Sales took off, but at the expense of Apple's costlier models. As a result, profit margins suffered and institutional investors soured on the stock, pushing its price down sharply. John Dessauer, a money manager and publisher of Dessauer's Journal in Orleans, Mass., believes Apple is ripe for a turnaround. As the economy recovers and new products such as its six-pound notebook-size computer hit store shelves, Dessauer predicts Apple's earnings could grow 20% annually for the next three years. With a rise in its P/E from a current 11 to 15, the stock would have a 135% gain. At worst, Dessauer figures Apple's earnings might rise 5% a year and its P/E might edge up to 12, for a 28% gain. IBM. When IBM (NYSE, $98.50) announced in June that its second-quarter earnings would slip 80% below those of a year ago, the computer giant's stock price sank to $97 -- 31% below its February high of $140. While most investors see Big Blue's recent poor performance as a reason to shun the stock, some value managers believe it's a ''must buy'' for conservative investors. ''You're getting a passbook rate of return with the 5% yield, plus you've got the real possibility of the stock price doubling in the next three years,'' says Richard Fontaine, portfolio manager of the Fontaine Capital Appreciation Fund. Fontaine, a former IBM employee, notes that on a value basis, the stock currently sells at less than 1.3 times its book value -- well below the 2.9 multiple for Standard & Poor's index of 400 industrial stocks. If IBM approaches the market's price/book ratio, as Fontaine believes it will, the stock could go as high as $230 a share. ''The great thing about this stock is that you don't need heroics here,'' he says. ''All you need is for IBM to get back to decent performance.'' -- NATURAL-RESOURCE STOCKS The stocks of oil, gas and precious-metals producers have been mercilessly pounded this year, creating an opportunity for investors who can catch the rebound. The best choices in this depressed sector:

Schlumberger. When oil prices settled in at a low $16 or so a barrel after the Persian Gulf war, the hopes for a boom in oil exploration faded -- as did the prospects for most manufacturers of oil-well drilling equipment. But the technological leader in drilling services, Schlumberger (NYSE, $56.25), could buck this bleak industry outlook, and its stock could zoom past its 1980 peak of $87 a share. The reason: Schlumberger does about half its oil drilling business in Third World countries where profits can be substantially higher than in the U.S., explains Shearson Lehman Bros. energy analyst Kenneth Miller. In addition, oil exploration activity in those countries is projected to increase by 21% over the next few years -- about three times the rate in major industrialized nations -- as Third World countries try to become less dependent on imports. Given Schlumberger's dominant niche in the fastest growing and most profitable sector of its industry, Miller believes profits will grow at least 25% a year, almost enough by itself for a double, even without an increase in Schlumberger's current P/E of 20. Wainoco Oil. An oversupply of natural gas and unnaturally balmy temperatures last winter caused a flame-out in natural gas stocks. For instance, Wainoco (NYSE, $5.25), a Houston-based oil and gas producer with extensive natural gas reserves in Canada, has fallen 55% from its 1990 high of $11.75. Although the stock is riskier than our 14 other picks, Richard Young, editor of Investor Intelligence newsletter in Newport, R.I., considers it a steal. Young figures that the company's gas reserves, drilling leases and other assets are now selling at only about a third of their actual value, which is close to $14 a share. The Value Line Investment Survey forecasts that natural gas prices could increase from $1.50 to $2.50 per thousand cubic feet by 1994. Says Young: ''Once there's a pickup in natural gas prices, Wainoco will take off.'' Homestake Mining. To purchase Homestake Mining (NYSE, $18.25), one of the largest U.S. gold-mining companies, you've got to have a true contrarian instinct. Despite some faint signs of life recently, the price of gold has languished below $400 for over a year now, and few economists expect another episode of the rapid inflation that sent gold prices soaring in the 1970s. As a result, Homestake is selling at 25% below its 1987 high. Young, however, sees a compelling case for the stock: Homestake is one of the most efficient, lowest cost producers of gold bullion. As a result, he says, ''this company can make a profit even without a jump in the price of gold.'' In June, Homestake Mining sold for $14 a share, or just 1.5 times its book value, vs. anywhere from 2.5 to five times book in the past. From its recent price of $18.50, or 2.3 times book value, Young foresees a gain of nearly 50%. Since gold stocks are extremely volatile, Homestake could easily slip back below $15. If it does, Young considers it a solid double from that price. -- TURNAROUND STOCKS Some of the market's most stunning returns go to farsighted contrarian investors who buy into a troubled company that is on the verge of revival. Here are four comeback candidates: Ford. An earnings drop of 80% last year and a probable deficit this year have pushed Ford's stock to $35.50 on the NYSE -- 37% below its 1989 all-time peak of $56.50 a share. But where others see red ink and a devastated stock, David Katz of Matrix Asset Advisors sees value: ''You're buying a major company at a big discount to its actual value -- plus you're getting a 4.5% yield.'' The benchmark that Katz uses for valuing Ford is the company's price- to-sales ratio -- that is, the share price divided by the company's sales per share. Ford's recent price-to-sales ratio was just 0.16 -- 30% below its 0.23 average and more than 50% below its 0.4 high for the past five years. As the U.S. comes out of recession, Katz expects Ford's sales to rebound from $215 a share to more than $250 by early 1994. ''The average age of cars on the road is at a record high of seven years,'' says Katz. ''So when the economy recovers, there should be a lot of pent-up demand.'' If the stock exceeds its average price-per-sales ratio, it could sell for $75. Sears Roebuck. ''By any measure, Sears is a cheap stock and one of the best values on the market today,'' says Mark Boyar, a New York City money manager. By Boyar's reckoning, the parts of the company -- whose shares trade on the NYSE at $37.50 -- are worth a lot more than the whole. If you tot up the value of the Sears retailing operation and the real estate value of its stores, then add in what subsidiaries such as Allstate Insurance, Dean Witter and real estate firm Coldwell Banker are worth, you come up with at least $80 a share. In addition, Sears is finally breathing life into its moribund retailing division and cutting costs -- by the end of this year, the company expects to eliminate 31,000 jobs. ''On top of that,'' says Boyar, ''you're getting a 5% yield.'' Fieldcrest Cannon. Unlike its towels, you can get Fieldcrest Cannon's stock below retail. In 1986, when takeover fever in the textile industry was at its height, the stock of this major manufacturer of towels and bed linens reached $43 a share. But after years of subpar profits, the stock nosedived to as little as $6 and now sells for $13.50 on the NYSE. Says Boyar: ''At that price, this stock is selling at just over half its book value.'' The company has been whipping itself into shape, dropping unprofitable divisions and trimming some 1,800 employees from its bloated payroll. As a result, says Boyar, ''even a meager economic recovery will lead to an exceptional boost to the bottom line.'' With a recovery to book value -- a reasonable assumption given that other major textile companies have been acquired at nearly twice book value as recently as 1989 -- Boyar figures that Fieldcrest would hit $25. Laidlaw. A recession-induced earnings decline has laid low the stock of Laidlaw, which is the third largest solid-waste-management company in North America. The company's class-B shares (which trade more actively than the voting class-A shares) have sunk to $10 on the NYSE, less than half their peak price of $24.50, which was reached last year. What's more, the stock now sells at just nine times earnings or 50% below the overall market's P/E, compared with a premium of 20% to 50% that the company enjoyed in the late 1980s. As the economy rebounds, Katz expects Laidlaw's earnings to grow again at 15% or so a year -- and he thinks the stock could sell at a P/E ratio 10% above that of the market. Says Katz: ''We think Laidlaw should sell for at least $20 within three years and could sell for as much as $25.'' Keep in mind that the ride with Laidlaw, as well as with these other turnaround stocks, can be bumpy. But price swings shouldn't bother you if you start buying near the bottom. After all, volatility isn't so nasty when you're riding it to a 100% gain.