(MONEY Magazine) – Think back to how your portfolio was deployed a year ago when Money published its 1995 list of All Star brokers and their top stocks. The stock and bond markets, you may recall, were as cheerless as a late-season contest between the league's cellar dwellers. U.S. stock funds as a group had earned a ho-hum 0.6% in the previous year. Prices of 30-year Treasury bonds had fallen 4% as yields surged two percentage points to about 8.2%. So more and more frustrated investors headed for the parking lots of money-market funds--only to miss all or part of the Dow's record-setting 1,000-point rally this year to around 4870 lately. Long-term Treasury bonds returned nearly as much, as yields boomeranged two percentage points to 6.3%.

If you weren't faked out--and followed our team's advice in 1995--congratulations are in order. Our 10 talented All Stars offered a portfolio of 30 picks and pans that matched the 22% rise for the S&P 500 index. That's quite a feat when you consider that, among managers of diversified U.S. stock funds, only 30% beat the market. Now, with the Dow hovering at record altitude, we chose a new All Star team and asked the brokers to name superior stocks for the potentially troublesome year that lies ahead. The resulting 30 recommendations, in the opinion of our stars, could produce surprising returns averaging 38%--a far cry from the single-digit gains that MONEY's chief forecaster Michael Sivy expects for the market as a whole.

Our new All Star roster sports six new members plus four repeaters from '95--the ones that outperformed the S&P 500. Leading our market beaters are the three Paine Webber brokers pictured on pages 66 and 67. Way out front is Isadore Friedman, a 26-year veteran from Boca Raton, Fla. who is making his third appearance on our All Star team. His picks for MONEY tallied not only an average 74% profit but also last year's biggest gain--the 102% run of $16 billion (annual sales) chipmaker Intel. Stanley Trilling, another third-year man and 26-year pro, placed No. 2 with a 46% return, eclipsing his championship 43% score in '94. And Steven Spence, No. 3, amassed a 40% profit that extended his amazing winning streak--and landed him on the cover of the magazine. Spence, a 24-year veteran from Portland, Ore., is the only broker to have earned a slot on each of the six All Star squads we've fielded since we began in '88. Since then, his annual gains have averaged some 27%, vs. his peers' 18% and the market's 15%. Spence's golden touch? "Focus on reducing risk, and let reward take care of itself," he says.

In recruiting our '96 team, we first asked money managers and brokerage executives to nominate exemplars at firms other than their own. To be considered, candidates had to be willing to take new accounts of $150,000 or less and to have a squeaky-clean record of professional conduct according to the National Association of Securities Dealers, the best source of disciplinary actions taken against brokers. Then we looked for the key attributes of accountability and independent thinking that tend to set All Stars apart from jacks-of-all-trades. Our 10 customarily:

Base their recommendations on their own research as well as that of analysts

Personally own the stocks on their buy lists--a show of confidence that is increasingly rare among brokers

Avoid selling most brokerage products, including funds, whose fat sales and management fees can handicap returns

Give regular customers commission discounts of 20% to 25% in many cases

The following bios appear in order of the four returning All Stars' average gain over a recent 10-month season, with the six new teammates listed alphabetically. They feature his or her top three picks (or pans) and overall '96 market outlook. Four are bullish, up from three in '95. Four are anxious, vs. six. And two are bearish, compared with just one. As a group, the 30 recommendations have the potential to appreciate 38% in '96, propelled by earnings growth averaging a bustling 22% (see the table on page 72 for target prices, dividend yields, if any, and other financial data). Such profit growth would be seven times the 3% rate forecast for companies in the S&P 500. Yet the picks are priced 13% below the market's earnings multiple, recently 16 based on most analysts' projections for '96.

ISADORE FRIEDMAN......1995:+74%

FIRM: Paine Webber, Boca Raton, Fla., 800-937-7071 AGE: 52. ROOKIE YEAR: 1969. CLIENT HOUSEHOLDS SERVED: 100. MINIMUM ACCOUNT: None. AVERAGE ACCOUNT: $2.5 million. OUTLOOK: Anxious.

RESUME: Native of Newburgh, N.Y.; graduate of the University of Pennsylvania and Georgetown Law School; career broker

CLIENTELE:Conservative investors who have placed their sizable personal and retirement accounts under his control

COMMENT: "Like last year, I need to see roughly a 20% annual return from a stock to compensate my clients for riding out the choppy market I see in '96," says Friedman. While his overall outlook for '95 was too cautious, his three recommendations each lapped the S&P 500's 22% advance. They were top performer Intel (up 102%), $1.9 billion biotech champ Amgen (up 75%) and Windows 95 whiz $6 billion Microsoft (up 46%).

PICKS: Again buy Intel (ticker symbol: INTC; recently traded over the counter at $68). Friedman says the chipmaker's industry-dominant technology ensures that its earnings can rise at least 27% in '96, lifting the stock 21% to $82. Expect 20% profit growth and 19% stock appreciation next year from $450 million generic drugmaker Mylan Labs (myl; New York Stock Exchange, $21). He thinks cost-conscious Mylan is also a possible takeover, at around $30, by a major drug company. And buy $8 billion media megalith Time Warner (twx; NYSE, $38), this magazine's parent corporation, for a projected 39% advance to $53 as investors increasingly recognize the money-minting potential of twx's impending buy-out of Turner Broadcasting.

STANLEY TRILLING......+46%

FIRM: Paine Webber, Los Angeles, 800-344-3786. AGE: 56. ROOKIE YEAR: 1969. CLIENTS: 350. MINIMUM: None. AVERAGE: $500,000. OUTLOOK: Anxious.

RESUME: Native of Los Angeles; graduate of the University of California at Berkeley; former marketer at drugmaker Hoffmann La Roche

CLIENT PROFILE: Entrepreneurs and money managers who demand fresh ideas from his five-broker Trilling Group with a branch in New York City

COMMENT: "The fast-expanding small firms we follow should really shine relative to the 4% earnings decline we see in '96 for the S&P 500," says Trilling. In '95, he picked two such hits: $615 million music wholesaler Alliance Entertainment (up 46%) and $56 million Williams Controls (up 24%), a parts supplier to truckers. He earned nearly that much (67%) on his short sale of $72 million Positive Response TV, an infomercial producer whose pricey stock flopped with investors, falling from $19 to $6.

PICKS: Buy $96 million Special Devices (SDII; OTC, $18), maker of triggering devices called initiators in auto air bags, for an 89% gain to $34. In '96, predicts Trilling, SDII's share of the $225 million initiator market will surge from 40% to 55%. Aim for a 57% run to $22 for Veterinary Centers (VCAI; OTC, $14). Profits at this $77 million chain of 52 clinics should jump 29% next year partly on fatter sales of premium Vet's Choice dog and cat food marketed in partnership with $9 billion H.J. Heinz.

PAN: Sell short $38 million Netcom (NETC; OTC, $79), an unprofitable provider of Internet access to 233,000 subscribers with a lofty market value of $869 million. That's $3,730 per sub, vs. $780 for on-line leader America Online with 4 million customers. His '96 target for netc is $15, an 81% nosedive.

STEVEN SPENCE......+40%

FIRM: Paine Webber, Portland, Ore., 800-245-0900. AGE: 48. ROOKIE YEAR: 1971. CLIENTS: 700. MINIMUM: $100,000. AVERAGE: $250,000. OUTLOOK: Bearish.

RESUME: Native of Pasadena; graduate of San Diego State; career broker who heads a four-adviser team

CLIENTELE: Entrepreneurs as well as senior executives of publicly traded companies who own stakes in their firms

COMMENT: "Making money in '96 will be tough in the face of weaker corporate profits and a stingy Federal Reserve," predicts Spence, who buys stocks at low prices relative to cash flow and assets. Last year's picks: $63 million software firm Data I/O (up 89%), $4 billion drug distributor Bindley Western (up 20%) and $90 million sneaker maker Vans (up 12%). For '96, he offers three other unrecognized bargains:

PICKS: Buy $700 million bicycle maker Huffy (HUF; NYSE, $10) in anticipation of federal sanctions soon being slapped on Asian producers that are dumping bikes in the U.S. Spence figures import restrictions will boost huf's per-share earnings from 15¢ this year to $1 in '96, propelling the stock 60% to $16. Buy $2.9 billion timber baron Louisiana-Pacific (LPX; NYSE, $24) now that it has agreed to pay up to $375 million in claims for defective siding products. Spence says lpx is worth $30, or 25% more, based on earnings, and may fetch $42, or 75% more, in a takeover bid for such undervalued assets as lpx's 1.6 million acres of timber. And he's gunning for a 25% gain to $15 for Citizens Utilities Class B (CZNB; NYSE, $12). Despite its name, cznb pays no dividend and earns 60% of its $1.1 billion revenues from rural phone systems that have not had long-distance access fees squeezed by competition.

ROBERT ANNING......+27%

FIRM: Merrill Lynch, Cincinnati, 800-234-2099. AGE: 55. ROOKIE YEAR: 1967. CLIENTS: 300. MINIMUM: $150,000. AVERAGE: $1.2 million. OUTLOOK: Bullish.

RESUME: Native of Cincinnati; graduate of Trinity College; former Navy intelligence officer who was assigned to Admiral Thomas Moorer's staff; heads the four-broker Anning Group that includes son Rob, 27

CLIENTELE: Wealthy midwestern families

COMMENT: "We strive to own stocks whose reliable profit growth of at least 15% a year greatly reduces the risk of losing money," says Anning, a four-year All Star. For '95, his appropriately Steady Eddie recommendations were all financial stocks: $31 billion (assets) credit-card issuer MBNA (up 36%), $10 billion Star Banc (up 36%) and $5.8 billion insurer Cincinnati Financial (up 9%).

PICKS: Again buy last year's laggard pick, Cincinnati Financial (CINF; OTC, $63). Anning thinks profits at this property/casualty specialist will rise almost 18% annually over the next two years, elevating the stock 19% to $75 in '96. Also bank on two-year earnings growth of about 18% a year from $2 billion battery maker Duracell (DUR; NYSE, $52). Anning's '96 target price is $63, a 21% gain, powered partly by new plants in battery-hungry India and China. Expect 16% annual earnings growth from thriving but low-profile Standex (SXI; NYSE, $33). This $565 million conglomerate of profitable small manufacturers earns an alluring 29% return on equity. Anning's target is $42, a 27% advance.

JAMES BUCKLEY

FIRM: Alex. Brown in San Francisco, 800-334-2640. AGE: 55. ROOKIE YEAR: 1964. CLIENTS: some 200. MINIMUM: $150,000. AVERAGE: $2 million. OUTLOOK: Bullish.

RESUME: Native of the Boston suburb of Newton; graduate of Boston College; former institutional broker for elite (but now extinct) Blyth & Co.; former president of Davis Skaggs & Co., a Bay Area brokerage that he sold to Shearson American Express in 1983

CLIENTELE: Active and retired corporate chiefs who follow the market as closely as many of his institutional customers

COMMENT: "I'm always on the lookout for bargains among stocks temporarily misunderstood by most investors," says Buckley. To dig them up, he prospects from a golden Rolodex of investment contacts compiled during the decades that he spent in institutional sales and management of brokerages.

PICKS: Buy $2.3 billion Vencor (VC; NYSE, $27), down 29% from its $38 peak in May. Buckley says the stock of this chain of 35 intensive-care hospitals is unduly depressed by uncertainties surrounding Medicare rules and vc's recent $1.9 billion purchase of nursing-home firm Hillhaven. He's confident that earnings can surge 34% next year, boosting the stock 67% to $45. Buy $5.8 billion garbage collector Browning-Ferris (BFI; NYSE, $29), down 29% from its July high of around $41 in step with weaker prices for recycled paper--only 13% of sales. Still, profits figure to rise an impressive 24% this year and 13% next, lifting the stock 55% to $45. And buy $89 million Felcor Suite Hotels (FLCO; OTC, $29). Buckley says this seemingly stodgy real estate investment trust more than doubled its portfolio to 31 hotels by buying $62 million rival Crown Sterling on the cheap. His '96 target for flco is $34, a 17% profit on top of its 6.3% yield over the next 12 months.

CHARLES DARE

FIRM: Merrill Lynch in Farmington Hills, Mich., 800-937-0446. AGE: 61. ROOKIE YEAR: 1960. CLIENTS: about 500. MINIMUM: None. AVERAGE: $1 million. OUTLOOK: Bullish.

RESUME: Native of nearby Bloomfield Village; graduate of Michigan State University, where he lettered in tennis; career broker who heads a four-adviser group that includes his son Charles Jr., 30

CLIENTELE: Senior executives and professionals in the U.S. and abroad

COMMENT: "The way to make money consistently is to swing for singles, not home runs," says Dare. To enhance his clients' batting averages, he selects stocks capable of increasing earnings substantially next year yet priced at big discounts to that growth rate. Take the three stocks he recommends below. They are projected to hike '96 profits an average of 30%, yet have price/earnings multiples averaging just 14--an enticing 54% discount.

PICKS: Buy $16 billion (total assets) credit-card company First USA (FUS; NYSE, $49), which Dare thinks can rise 53% to $75 in '96 based on his forecast of bustling 33% growth in earnings. He's also betting on a 26% gain to $24 for $2 billion bookseller Borders (BGP; NYSE, $19) in expectation of a 29% profit surge next year at its 112 superstores and 1,030 Waldenbooks shops. And look for today's $68 stock of Intel (INTC, OTC), also picked by Isadore Friedman, to expand its earnings 28% in '96 and to appreciate about 32% to Dare's target of $90.

BUZZ GARLOCK

FIRM: Dain Bosworth in Omaha, 800-950-3246. AGE: 41.ROOKIE YEAR: 1980. CLIENTS: 175. MINIMUM: None. AVERAGE: $150,000. OUTLOOK: Bullish.

RESUME: Native of Omaha; graduate of Nebraska's Bellevue University, where he captained the baseball and basketball teams; manager of Dain Bosworth's 13-broker Omaha office

CLIENTELE: Local executives, physicians and money managers

COMMENT: "My research focuses on small, unheralded companies where business seems destined to improve much faster than most other investors can imagine," says Garlock. What about billionaire Warren Buffett, Omaha's investing Babe Ruth? "I've struck out so far trying to pitch him stock ideas," grouses Garlock. Following are his current top three for Buffett wannabes:

PICKS: Buy Noble Drilling (NDCO; OTC, $7), a $352 million survivor of the '80s oil bust that's now the world's top independent offshore drilling contractor. By '97, Garlock predicts that rising demand for 250-foot oil rigs (half of Noble's 46 total) will boost day rates per rig some 50% to about $24,000, propelling the stock 71% to $12 next year. Stuff holiday stockings with shares of Northland Cranberries (CBRYA; OTC, $17), a $30 million grower that aims to triple sales by fiscal '97 by marketing its own brands of higher-margin juice and other berry products. Garlock's '96 target is $24, a 41% profit. And shoot for a 27% gain to $14 next year on $7 billion in assets Hibernia Corp. (HIB; NYSE, $11), a bargain-priced Louisiana bank that Garlock thinks is ripe to be swallowed by an out-of-state acquirer.

LAURA HARRISON

FIRM: Smith Barney in San Francisco, 800-289-9060. AGE: 32. ROOKIE YEAR: 1985. CLIENTS: about 150. MINIMUM: $100,000. AVERAGE: $250,000. OUTLOOK: Bearish.

RESUME: Native of Eagle Point, Ore.; raised on family's 1,000-acre Devonacre cattle ranch; graduate of Colorado State; career broker

CLIENTELE: Younger professionals

COMMENT: Ranching instilled in Harrison respect for the commodities markets' feast-and-famine cycles. Now she fears many stock market bulls have become blind to risk, setting them up for the messy 20% Dow sell-off she sees in '96. "Overall, stock valuations and investor expectations are unsustainably high," she warns. So she recommends two buys that have had much of the risk wrung out of them by recent stumbles--plus a short sale for seasoned investors.

PICKS: Buy $2.1 billion software house Novell (NOVL; OTC, $17), down 26% from its May high of $23. Next year Harrison sees a 35% rebound to $23 sparked by Novell's recent decision to sell its money-losing office programs led by WordPerfect (15% of sales) and expand its core networking ware (76%). Buy $15 billion Caterpillar (CAT; NYSE, $57), off 24% from its July peak of $75 in step with concerns that '96 profits will be flat at the earthmover maker. She sees a 12% profit rise and 23% appreciation to $70 from continuing cost reductions and share buybacks.

PAN: Sell short red-hot Thermolase (TLZ; American Stock Exchange, $26), the $22 million inventor of laser-powered hair removal. "tlz's patents and prospects in no way justify its huge $940 million market value," says Harrison. Her target is $11, a 58% profit.

PAMELA ROSENAU

FIRM: Schroder Wertheim, New York City, 800-992-9876. AGE: 35. ROOKIE YEAR: 1984. CLIENTS: 180. MINIMUM: $150,000. AVERAGE: about $1 million. OUTLOOK: Anxious.

RESUME: Native of Bryn Mawr, Pa.; graduate of Sarah Lawrence (B.A.) and Emory University (M.B.A.)

CLIENTELE: Wealthy people, including many single women and the family of Schroder president Steven Kotler, who pay Rosenau's annual fee (up to 1% of stockholdings) to manage their money

COMMENT: "Clients expect me to create portfolios that strike a sturdy balance between growth and income," says Rosenau, "yet still manage to beat the market over time." For the growth side of the equation, she favors somewhat dowdy stocks that have the potential to bounce back into vogue within 12 months. Here are three top candidates.

PICKS: Buy $2.7 billion papermaker Temple-Inland (TIN; NYSE, $45) for a projected 56% gain to $70 in '96. Rosenau's target price is based on her forecast of booming 35% profit growth plus rising recognition that investors pay nothing for tin's Texas-based $9 billion Guarantee Federal Savings Bank, which she says is worth $15 a share. Buy Crown Cork & Seal (CCK; NYSE, $40), a $5 billion supplier of cans and bottles to beverage companies. Rosenau believes '95 profits may be squeezed 20% by higher prices for aluminum and plastic resins. Next year, however, raw materials are likely to plateau and start a 65% earnings rebound that carries the stock up 25% to $50. She's betting on 23% profit growth and 23% appreciation next year for $8 billion Colgate-Palmolive (CL; NYSE, $69), where net will take a one-time 9% hit in '95 because of hard times in Mexico, which is the source of 11% of the home-products giant's sales.

JIM VENETOS

FIRM: Smith Barney, New York City, 800-323-7788. AGE: 50. Rookie year: 1979. CLIENTS: 100. MINIMUM: $150,000 AVERAGE: about $1.5 million. OUTLOOK: Anxious.

RESUME: Native of Brooklyn; graduate of Cornell (B.S.) and the University of Massachusetts (M.B.A.); former manager of hotels like the venerable (circa 1884) Old Deerfield Inn in Deerfield, Mass.

CLIENTELE: Monied families and many foreigners who value Venetos' skills with languages (German, Greek, Italian and Spanish) as well as investments

COMMENT: "I aim to earn at least 15% a year without sticking clients' necks out on highly cyclical stock groups," says Venetos. And he doesn't try to divine the market's next turn. Instead, he invests in exceptional businesses that, he says, "I admire as a former manager who was personally responsible for the bottom line." He quickly adds: "And the hotels that I managed made money."

PICKS: Buy $16 billion American Express (AXP; NYSE, $43). Venetos says this once flabby charge-card giant has been whipped into great shape by new chief Harvey Golub, who headed axp's booming Financial Advisors (nee IDS) group of mutual funds and insurance. "Investors often overlook IDS, which is easily worth $18 a share," he says. His '96 target for the whole company is $55, a 28% gain. Buy $6.5 billion Gillette (G; NYSE, $49) for a projected 22% rise to $60 powered by shavers trading up to its higher-margin Sensor Excel blades. "Some 70% who try them buy 'em," Venetos says. And go for $4 billion newspaper empire Gannett (GCI; NYSE, $57). He's betting that the stock can rise 16% to $66 in '96 on the coattails of the Atlanta Olympics and presidential elections--both bullish for newspaper ad linage and circulation.