Hassett's credentials include posts as a senior economist with the Federal Reserve Board of Governors and associate professor of economics at Columbia University, but he's probably best known as co-author of Dow 36,000 -- obviously, he's an optimist about the market's long-term future.

It should be noted that although Hassett believes that stocks as a group are undervalued, he also says there are times when buying can be overdone; Hassett's latest book is Bubbleology: The New Science of Stock Market Winners and Losers, which looks at the cause of market manias, and highlights indicators that a stock is rising too quickly.

Hassett is an optimist about the market's long-term future -- and lately he's become more upbeat about its immediate prospects. Although last month he told Newsday and The Financial Times that the war in Iraq could provoke a recession, Hassett now sees the possibility of an "unprecedented boom" in the economy following a relatively brief war with Iraq.

As a scholar at the conservative American Enterprise Institute, it's no surprise that Hassett generally support President George W. Bush's economic proposal, including its central feature, the elimination of taxes on dividends. "The economics of the president’s proposal is very sound," Hassett recently told the Senate Finance Committee.

Hassett received his Ph.D in economics from the University of Pennsylvania. He was the chief economic adviser to Republican maverick Sen. John McCain during the latter's presidential campaign in 2000, was a policy consultant to the Treasury Department in the Bush and Clinton administrations, and is an adviser to FORTUNE 500 companies.

Back to the top

Dudley, the man in charge of Goldman Sachs' economic and interest rate forecasts for the United States, doesn't like what he sees right now. And it has little to do with the war in Iraq. Instead, he believes the economy still reels from the bursting of the stock bubble and a general focus on cost-cutting rather than growth.

Companies are more worried about slashing expenses. "This is not a driver of the economy," Dudley told Asset Securitization Report. "They would look for increased cash flow first before they focus on capital spending."

And some areas that propped up the economy in 2002, such as mortgage refinancing, probably won't grow as much this year, Dudley said. And cutbacks by deficit-strapped state governments could offset any 2003 stimulus from federal government spending, he believes.

His bearish view isn't anything new. Dudley was one of the first to correctly predict the 2001 recession, and was right in forecasting a slow recovery in 2002. He was the top-rated economist for Institutional Investor's All-America Fixed-Income Research Team in 2000, and ranked second in 2001 and 2002.

Goldman Sachs hired Dudley in 1986. Before becoming the company's chief U.S. economist, he produced the company's foreign exhcange outlook in 1994 and 1995. Prior to that job, he spent eight years analyzing U.S. financial markets and was senior economic adviser to Robert Rubin, who later became Treasury Secretary during the Clinton administration. Dudley is a member of the technical consultants board to the Congressional Budget Office and is co-chairperson of the economic advisory committee of the Bond Market Association.

Dudley received his doctore from the University of California at Berkeley in 1982.

Back to the top

Smart Money magazine last month described Whitman as the "reigning king" of "tough-guy" investors -- money managers who try to make a killing by investing in ailing companies. He scoffs at efficient market theory, perhaps for good reason: over the past 10 years, his Third Avenue Value Fund's net annualized return of 9.6 percent tops the S&P 500 by more than a full percentage point over the same period.

The Third Avenue approach zeroes in almost entirely on specific companies, regardless of the economy or war. But Whitman's ways require patience, since he's willing to wait years for his investment to turn around; Third Avenue Value Fund underperformed the S&P 500 from 1996 through 1999, according to Morningstar statistics. But the ones who hung on were rewarded, as his fund has beaten the index each of the past three years, including net returns of 20.8 percent in 2000 and 2.8 percent in 2001. And in the early 1990s, Third Avenue was routinely racking up annual gains of 20 percent or more.

"Its all-cap style and penchant for venturing overseas also won't suit style purists," reads a Morningstar analysis from March 28. "For others, however, we think this is a great long-term holding for small- and mid-cap exposure. Good tax efficiency and reasonable expenses also argue in its favor."

His prominent investment these days is troubled K-Mart; Third Avenue scooped up K-Mart's debt to become one of the company's two largest creditors, and soon Whitman's fund will be one of the retailer's biggest shareholders because of a plan that would convert debt to stock in exchange for a cash infusion. In his view, for a cheap price he's getting into a company that, if nothing else, has plenty of real estate.

Other holdings of Third Avenue include Toyota Industries, Forest City Enterprises, Tejon Ranch, AVX and MBIA. And he has a long history of investing in utilities.

Whitman has taught a class on finance at the Yale School of Management for 28 years. He wrote The Aggressive Conservative Investor and Value Investing -- A Balanced Approach. He graduated from Syracuse University in 1949 and received a masters degree in economics from the New School for Social Research in 1956. Whitman is a chartered financial analyst.

Back to the top

While Martin Whitman dismisses ideas of efficient markets, Sauter's job is to embrace them. Vanguard is the standard-bearer for index investing, although the specific indices in question can change: the company this week announced that it would switch of its funds from Standard & Poor's and Russell benchmarks to ones developed by Morgan Stanley Capital International. However, Vanguard's biggest portfolio, the Vanguard 500 index fund, will still be tied to the S&P 500.

In Sauter's view, even index funds should reflect investment styles, rather than being tied to a particular economic or fundamental outlook. Stocks are the best place to be in the long run, Sauter believes, although he also sees continued near-term volatility. Eventually, he says, the economy will drive stock prices, rather than the other way around.

Sauter oversees about 70 percent of Vanguard's mutual assets. Before assuming his current job last month, Sauter was in charge of Vanguard's Quantitative Equity Group.

He received his bachelor's degree in economics from Dartmouth College and a masters in finance from The University of Chicago. He is a member of the Institutional Traders Advisory Committee of the New York Stock Exchange and the Trading Committee of the Investment Company Institute, and was on the Quality of Markets Committee of NASDAQ and the AIMR Best Execution Task Force.

Back to the top