Tantalum may be tantalizing, but investing in it is tricky

Many of the people buying shares in them probably cannot pronounce some of their names, don't know what they look like, and wouldn't know what to do with them if they had them.

But investors are buying millions of dollars' worth of them anyway.

as a group, they are known as strategic metals.Individually, they have names like molybdenum, germanium, tantalum, rhodium, and iridium. They also have more familiar names like cobalt, aluminum, copper, platinum, chromium, and tungsten.

They are used in things like jet engines, computers, communications equipment , and automobiles. Some of them, like cobalt -- essential in jet engines -- come from places like Zaire, where a brief war in 1978 sent the price skyrocketing. Others, like chromium, come from southern Africa and the Soviet Union.

Uncertain supplies and ever-increasing demand make strategic metals look like a sure thing to many investors.

but others are more cautious:

"The whole business of buying strategic metals is so fraught with danger that people should be very, very careful," says Gordon McLendon, author of "Get Really Rich in the Coming Super Metal Boom," a book that discusses investing in strategic metals.

"I don't feel that now or in the foreseeable future is the time to get into strategic metals," he argues. At this time, he explained, the market for these metals is depressed, and he does not see prices going up in the near future. "In the long run, however, it may be a different story."

Roy Brenna, manager of the Strategic Investments Fund in Dallas, agrees. His fund has been chartered to sell mutual fund shares in strategic metals since the mid-1970s, but it has stuck to buying shares of South African gold mining stocks , a strategy Dr. Brenna plans to continue.

There are two ways investors can buy strategic metals, he noted. The first, and most dangerous, is to buy the metals themselves and have them stored someplace. One danger in this is that there are many illegal metals-sellers operating who promise quick profits and cheap storage, if the buyer will only send in a check.The buyer never sees the metals, and probably never sees the dealer or his money again, either, Dr. Brennan said.

Another danger in buying the metals is the likely difference in the "bid" and "asked" prices, with the investor receiving much smaller bids than he is asking. "When you go to sell cobalt, for instance," he said, "and the buyer knows that you're not a cobalt user -- that you havem to get rid of it -- you'll quickly see a difference between the bid and asked prices."

The second way to buy strategic metals may seem less dangerous, but it has a short track record.

While Strategic Investments has been permitted to sell shares in strategic-metals investments for several years, two other firms are just entering the picture. One of them, Bache Halsey Stuart Metals Inc., is in its first year of selling metals to qualified investors. Qualified, said Elliot J. Smith, president, means a net worth of $75,000 $20,000 in liquid assets, and $25 ,000 annual income.

"And we're really looking for someone who's investing for the long haul," Mr. Smith said. "That means at least two years, and probably much longer."

The best hope for strategic metals, he said, comes in a "scenario that we are going to get a good handle on inflation, and business activitiy will step up dramatically. When business starts to turn they [manufacturers] are going to come into the marketplace" for strategic metals.

An example of this is platinum, used in automobile emission control systems. Reflecting the drop in car sales, the auto industry purchased 517,000 ounces of platinum last year, compared with 803,000 ounces in 1979, according to a report by the J. Aron Commodites Corporation. Presumably, if auto sales pick up, platinum prices will soon follow, increasing the value of a portfolio.

another firm, Strategic Metals & Critical Materials Inc., affiliated with metals expert James Sinclair, has filed a registration statement with the Securities and Exchange Commission.

Last week the stock market got to see what happens when the money supply takes a big jump. Prices plummet. This week, investors hope the laws of money- supply inertia work the same way: in their favor.

After a $6.9 billion jump in the money supply, the Dow Jones industrial average fell to a seven-month low, dropping 22.16 points to 936.74. It lost over 34 points in the first three days of trading.

Investors may be heartened, however, by the $5.9 billion money supply decline reported July 24.