NEW YORK, JULY 7 -- The manager of Attorney General Edwin Meese III's blind partnership was able to achieve substantial profits for the partnership by buying selected stock -- mostly new issues -- and selling them the same day.

This speculative trading strategy, referred to in Wall Street parlance as "flipping" or "day trading," has been used regularly for Meese and others by money manager W. Franklyn Chinn, the San Francisco businessman who manages Meese's partnership. Several sources, who asked not to be identified, said Chinn specializes in buying stocks when they are first sold to the public, and frequently profits by selling them the same day.

The strategy enabled Chinn to produce more than $35,000 in profits for Meese's partnership even though the partnership actually owned stock for only 19 days of the 760 days of its existence.

Meese had invested about $50,000 with Chinn. His total pretax return, after subtracting Chinn's advisory fees, was about $41,000 between July 1985 and May 31, 1986, including the $35,000 in trading profits and more than $6,000 in interest.

Chinn made a profit on 18 of 23 same-day trades he executed for Meese, a "hit" ratio of 78 percent. The key to his success, according to several Wall Street sources, was his strong relationship with brokerage firms that enabled him to be allocated a portion of some of the hottest new issues, including British Airways, on which he made a one-day trading profit of $12,571 in February.

Other hot new issues that Chinn traded for Meese included Reebok International Inc., Microsoft Corp. and Morgan Stanley Group Inc.

When an investment firm distributes a new issue of stock for a public company, it frequently tries to price it so that the stock will rise in trading that day. One reason is that the investment firm wants its regular clients, such as Chinn, to be willing to take shares in the next deal that the firm manages. Another reason is that the investment firm wants to create a positive image for the stock on its first day of trading.

One Wall Street source said that recently, the average initial public offering of stock (initial sale of shares to the public by a company) has increased 10 percent to 20 percent in price the first day. Chinn's trading strategy benefited from this trend.

However, when an initial public offering is hot, there usually isn't enough stock to go around. Thus an individual investor who tries to get shares in a hot offering might be turned down. Instead of getting the shares at the initial offering price, which also saves a trading commission, an individual could be forced to buy stock in the open market.

Chinn's success is attributable to his ability to get stock at the offering price from the Wall Street firms managing the offering. Sources said one reason he was able to get shares was that he was willing to take stock in many deals, including some which were not considered to be hot. Chinn's ability to get shares in offerings, sources said, may also be attributable to his managing money for prominent people and to his ability to be sure that various investment firms regularly earn brokerage fees from his trading.

Two Wall Street sources speculated that Chinn managed money for a number of clients and may have allocated profitable trades at the end of the day to Meese. While it appears from the financial records that Chinn was allocating only a portion of his overall trading activity to Meese, there is no hard evidence that Meese was receiving better treatment than other Chinn clients. Meese also suffered losses on five of the 23 trades.

Wall Street analyst Perrin Long said he found it unusual that money in a blind partnership would be managed on a short-term trading basis that consisted entirely of same-day trades.

"I've never heard of somebody managing a blind trust doing nothing but day trades," Long said. "It is not a thing one would find under the prudent-man rule. It is not unusual for institutions and some individuals to be day traders. What this sounds like is these trades were made in stocks where there was a considerable demand by institutions {for shares} at the initial public offering.

"Day trading is like going to Las Vegas or Atlantic City and putting $15,000 on the crap table. But you don't normally lose money on initial public offerings when the market is strong, {even} if you are a day trader."

Chinn is a former director of troubled Wedtech Corp., the bankrupt defense contractor. He first became associated with the company as a consultant in April 1985. A month later, he entered the blind partnership with Meese. Chinn was introduced to Meese by San Francisco attorney E. Bob Wallach, a longtime Meese associate. Wedtech is under investigation for bribing government officials, and Meese's role in connection with that probe also is under review.