Thanks to a rising stock market, most brokers had a winning year in '80. And leading the parade was Steve Karelitz, a senior vice president of brokerage biggie Shearson Loeb Rhoades. The 46-year-old Karelitz, the country's biggest retail producer, chalked up gross commissions of about $2.5 million. Figure he gets 40 percent of the commissions -- which is $1 million. It's no wonder the guy drives around in a $155,000 Rolls Royce Corniche convertible or a $46,000 Mercedes.

Obviously, Karelitz must be doing something right. And based on what he tells me about his '80 market performance, he is doing something right. Karelitz, who works out of Shearson's Boston office, has approximately 3,000 accounts, about 500 of which are active market players. And in '80, he tells me, his average active client was up a minimum of 50 percent -- that's more than triple the advance of the Dow Jones Industrials and about double the rise of Standard & Poor's 500-stock index.

So how does the No. 1 retail broker view the '81 stock market?

A difficult first half, followed by a rising second six months, he says.

But Karelitz, who has a reputation as a fine stock-picker, thinks specialized areas of the market -- notably energy -- should turn '81 into a good moneymaking year for the astute investor.

Karelitz doesn't try to palm himself off as some analytical whiz on the market -- but more as someone with a sixth sense about individual stocks. But he thinks there is enough evidence to suggest that the market will be hard pressed to make any meaningful and sustained headway early in the year. His reasoning: a sluggish business environment (producing poor corporate profits) and the likelihood that interest rates will settle at a higher level than most people think. Karelitz expects the Federal Reserve to be a miser in its allotment of credit since it cannot permit people to run out and borrow all the money they want. That would reinflate everything and put us in an even worse economic mess, he says.

His forecast that the market will improve in the second half of the year is largely based on the belief that confidence will grow amid increasing recognition that a wishy-washy president has been replaced by a decision-maker. By the end of 1981, Karelitz figures the Dow Jones Industrials will be in the 1,050-1,100 range.

Karelitz, a broker since 1960, hit it big on a number of stocks last year. Chief among them: Western Co. of North America, Southland Royalty, Computervision, Mesa Petroleum and Waste Management.

And two of them, Waste Management and Western Co. of North America, remain among his five favorites for 1981. The other three: Natomas, Smith International and Standard Oil of Indiana. (These five stocks comprise 60 to 75 percent of all new Karelitz accounts.)

"If the fundamentals are right, I'll ride with my winners," he says, "because that's where the big money is really made."

He notes, for example, that he started buying Natomas about a year and a half ago at about $46. It subsequently rose to about $148 before two stock splits and is now around 39 1/2. Karelitz says Natomas' earnings have risen about fourfold since he bought the stock. "And I'm still buying it today because the earnings momentum is there," he tells me. He expects the company to report more than $4 a share for 1980 and earn more than $5 in '81. He sees an even heftier profit surge in '82.

Karelitz thinks so much of his five favorites that he personally owns anywhere from 10,000 to 100,000 shares of each. In total, based on the numbers he gave me, that's about $13 million worth of stock.

Four other securities Karelitz likes -- and owns -- are Del-Med (health care services), Ktron (maker of electronic measuring and weight devices) and two additional energy plays: Belco Petroleum and Damson Oil.

Explaining his infatuation with energy, Karelitz tells me: "I think it'll be the big game again in '81, particularly the domestic oils. Prices are going up, not down, the companies can sell everything they produce and higher oil earnings should look especially attractive in a recessionary environment."

Interestingly, Karelitz's strong endorsement of energy comes at a time when an increasing number of pros are downgrading the oils in favor of some of the big bread-and-butter companies (like General Electric and United Technologies) and interest-rate-sensitive giants (such as Citicorp).

Karelitz's chief philosophy in buying a stock: "If I don't see 50 to 100 percent potential in 12 months, I don't buy. There're just too many undervalued situations around that offer such returns. And if I buy a stock that doesn't act right, I get out -- and pronto. I won't ride long with a loser, which is the way you get killed."

A network of broker contacts and access to corporate managements because of his buying power are also important ingredients in Karelitz' success.