One broker's view--favors 'born-again blue chips'

''This is going to be the decade of equities.''

With the Dow Jones industrial average closing below 800 last Friday, such a view is obviously not that of the current majority of investors. Share prices have been falling under selling pressure.

But Paula D. Hughes, one of the nation's top 10 stockbrokers, maintains that in the 1980s investors ''are going to be able to buy stocks and put them away for the first time in most of our adult lives, indeed for the first time since the 1930s.''

In other words, this first vice-president of Thomson McKinnon Securities Inc. , figures many stocks are a bargain. The Dow industrial average of 30 major stocks, she notes, has moved in the 600 to 1,000 range for 16 years--despite rapid inflation and continued corporate growth.

Paula Hughes is probably the nation's most successful female broker, making more than $1 million a year in commissions. Starting in 1961, she fashioned her career in the securities business by studying and recommending ''secondary stocks''--shares of relatively small and medium-sized firms rather than the so-called ''blue chips'' that go into the Dow Jones industrial average. She figured that in the political atmosphere of the 1960s and part of the 1970s, with environmentalists and other critics of corporations holding sway, ''the big , highly visible stocks were going to be vulnerable.''

She was basically right. The stocks of the major companies have done poorly.

To survive the turbulent stock market years of the past two decades, she recalled, required ''aggressive trading.'' You could not let most stocks sit for any length of time in a portfolio because of rapid shifts in prices.

About a year ago she changed her mind and began recommending ''born-again blue chips''--the stocks of heavily capitalized major corporations. ''The political climate has shifted,'' she noted in an interview. ''Ralph Nader couldn't fill an auditorium today.''

The shift to the right politically, she says, has been accompanied by a new emphasis on quality. ''We are going to demand excellence and get it. Only the fit and prudent will survive as individuals and companies. People will pay the extra dollar to be sure of value. This will make the position of the manufacturer of shoddy products very tenuous.'' In the stock market that translates into a search for companies producing quality products, managed prudently with healthy balance sheets and solid earnings.

Mrs. Hughes suggests that the stock market could decline to the 760-780 area for the Dow index in the ''worst case'' if institutional investors continue to dump stock in ''herd fashion.'' Then she expects prices to bounce up to the 900- 920 level and after a year or 18 months and possibly slide back before rebounding once again to new higher levels.

But when will the stock market turn up?

Mrs. Hughes looks at a number of market ''indicators'' of a bull market, some of which have already turned favorable:

* Stocks stop reacting to negative news, such as bad earnings forecasts.

* The majority of stock market pundits become bearish--predicting a downturn in prices. To her, that signals the reverse.

* Professional investors stop selling as much stock short--that is, borrowing stock, expecting to actually buy it later at a lower price.

* The public--small investors--guess wrong and start selling short.

* Corporate insiders (such as executives) buy more of their own companies' stock.

* There is a ''selling climax''--a day when stocks plunge on heavy trading--followed by a ''broad upturn''--a rise in price for many stocks.

* Stock mutual funds allow their cash positions to rise from a normal 8 percent of their portfolios to about 11 percent. It is now about 10.5 percent. The extra cash would allow the funds to do some heavy buying.

* Interest rates drop, shown in cuts in the prime rate charged by commercial banks and the discount rate levied by the Federal Reserve System on loans to commercial banks. Rates have started to decline.

* Foreigners show bad judgment by slowing their purchase of American stocks.

* The stock of General Motors Corporation shows no new price low for some four months. If it doesn't drop below 337/8 by later this month, it will have reached that four-month point. It currently stands a bit above $38.

Mrs. Hughes does have some current stock favorites. She likes Dreyfus Corporation, the mutual fund manager, because of its ''superior marketing.'' She also recommends Comsat, the communications satellite company. She suggested United States Steel Corporation to her clients more than a year ago, and they have done well. The company expects to pay off its debt acquiring Marathon Oil in two years, she notes.

She suggests buying long-term Treasury bonds (eight to 10 years) because rates should be down to 12 percent this year, providing a capital gain for those holding such bonds with higher coupons.

Whether her recommendations will pan out remains to be seen, of course. But various investors have given her $80 million to manage at her own discretion. And she advises institutions managing $500 million. Not many brokers, male or female, can claim that kind of clout.