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We asked the sharpest pros around to give us their No. 1 recommendation in today's high-flying markets. Their gems range from a car insurer to 30-year Treasuries. by Gary Belsky
 Marilyn Cohen
Envision Capital Management
Top pick: Leucadia National bonds
The former head of fixed income at a Los Angeles money-management firm and one of the three seers on our Forecast 1995 cover, Cohen, 45, went into business for herself last April. Already she has amassed a tidy $50 million under management-little wonder given her 8.1 % total return annually since January 1993 in her short-term taxable bond portfolio, vs. 5.3% for the average short-term bond fund.
Cohen's forte is squeezing out high yields with minimal principal risk. A prime example is her top pick Leucadia National's I0-3/8S (recently traded at $108; symbol: LUK). Cohen expects that Leucadia, a $1.4 billion diversified holding company that recently bought a 7% stake in Rockefeller Center, will call these seven-year premium bonds at the earliest possible date,June 15,1997,at$104.50. Until then, investors will earn a 7.93% effective annual yield. The premium, Cohen says, partly reflects the fact that interest rates have dropped significantly since the bonds were issued in June 1992. Another reason: the financial strength of Leucadia. She says the bonds, rated an investment-grade BBB by Standard & Poor's, pose little risk for conservative income investors trying to beat the current two-year U.S. Treasury yield of 6.1%. Says Co-hen: "You're getting an above-average rate of return for only an incremental risk. What more could you ask?"
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