(MONEY Magazine) – One of the tenets of sound investing is to buy what you know. And the new, exclusive MONEY/Nordby Cities Index of leading stocks in 24 major metropolitan areas shows how great the opportunities can be for investors who want to put their money to work close to home. The results for the first 11 months of 1993: 15 of the 24 cities gained 10% or more; Phoenix led the way with an astounding 36.9% increase (see the table opposite). In addition, all but five cities beat the 6% increase in Standard & Poor's 500-stock index so far in 1993. < However, results did vary widely across the country. Here's some of what our index reveals for 1993: -- The Southwest was the biggest winner. In addition to Phoenix, Dallas, Denver and Houston posted double-digit gains -- 32.8%, 11.9% and 11.7%, respectively. WThe Northeast came in second. The leader in that region was Long Island, N.Y., up an impressive 25.5%. And both New York City (13.9%) and Boston (11%) were solid performers. -- Mid-Atlantic states were the weakest. At 13.1%, Baltimore did fairly well, but the other cities were all subpar. Philadelphia managed only 6.4%, Washington, D.C. 4.7% and Pittsburgh lost 1.3%. To create this index, which is composed of a series of 24 individual city indexes, Money and Nordby International, a financial data firm in Louisville, Colo., chose a dozen stocks with headquarters in each metropolitan area. The companies were selected to represent locally important industries. Each of the 288 stocks that make up the Cities Index sells for at least $5 a share and has a total market value of $200 million or more. The index tracks only price changes, not dividends, and the stocks in each city index are equally weighted. Six of the 24 cities managed to turn in gains of more than 20% for the first 11 months of 1993: The Phoenix Index topped the list largely on the strength of two of its 12 stocks. MicroAge, a computer retailer with annual sales of $1.5 billion, was the best-performing stock of all 288 issues. It recorded a 353.1% gain as the company added 310 new stores, bringing its total to 1,555. Similarly, $325 million Giant Industries, which refines and markets gasoline in Arizona and New Mexico, soared 97.7%, as the price fell for its chief raw material, crude oil. The Dallas Index took second place with a 32.8% gain, thanks primarily to three stocks: DSC Communications, sales of $695 million, which manufactures and markets telephone switching systems, soared 146% as demand surged for the company's fiber-optic telephone systems used to transmit data. Southwest Airlines, $2.1 billion, jumped 76.6% as the discount carrier's earnings rose 54%. And Brinker International, $653 million, scored a 51.3% gain on the continuing success of its Chili's restaurant chain. The Long Island, N.Y. Index came in third at 25.5%, powered by three stocks that gained 50% or more. First, $2.2 billion Computer Associates International jumped 96.3%. The company is expanding its market by redesigning its popular software to run on small computers as well as mainframes and mid-size machines. Second, $665 million Cablevision Systems advanced 86.8% amid rumors that it would be taken over in the spate of telephone and cable-television mergers. Defense contractor Grumman, $3.3 billion, rose 64.3% on large orders to update aircraft for the U.S. Navy and $700 million in aircraft sales to Taiwan. The Chicago Index was fourth, with a 24.6% gain. The big gusts in the Windy City came from $1.4 billion General Instrument, a maker of cable-TV equipment. The stock soared 109.3% on investors' expectations that the company would be a major supplier to cable systems upgrading their equipment to handle multimedia. In addition, $16.6 billion Motorola advanced 79.4% because of growing demand for its computer chips and cellular telephones. The San Diego Index, which captured fifth place with 23.6%, was led by a 200% profit from $250 million Callaway Golf, a maker of innovative golf clubs, including the popular oversize Big Bertha. Qualcomm, $170 million in sales, rose 117.5% on strong demand for its digital wireless communications technology. Finally, Miami took sixth place with 22.1%. The biggest gainer was $2 billion Blockbuster Entertainment, which reported a 78% increase, thanks to robust videocassette rentals. As for the region-by-region results, after the Southwest (23.3%) and the Northeast (16.8%), the South came in third at 16.1%. The Central states ranked fourth, at 11.5%. The Midwest was fifth at 10.8%. The West Coast rated sixth at 10.6%, followed by the last-place Mid-Atlantic states with a subpar 5.7%. That's one place, at least, that investors would have been smart to pass by local stock choices.

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CHART: NOT AVAILABLE CREDIT: Source: Nordby International CAPTION: THE MONEY/NORDBY CITIES INDEX This exclusive index of leading stocks in 24 cities shows that sunny Phoenix and Dallas were the top places to make money in local companies during the first 11 months of 1993. Long Island, N.Y. came in third. Overcast Seattle's stocks, by contrast, lost more than 3%. Based on regional averages, the Southwest was the biggest winner by far, with a 23.3% profit, while the Mid- Atlantic gained only 5.7%.