Guessing game: Barry Strudwick, President

Strudwick & Associates Inc. in Baltimore

Assets under management: $55 million

Forecast:

The dominant economic theme in the United States since 1997 has been global deflation. That seems likely to persist through 2003, despite the Federal Reserve’s efforts to reverse the trend, Mr. Strudwick says. The Fed is likely to fail because there is no global economic authority to coordinate the countries that participate in the global economy. That will lead to continued downward pressure on interest rates, he says.

The bottom line is that profit margins will continue to erode, so Mr. Strudwick is reducing his allocation in stocks to 55%, from 75%.

The finish line, 2003:

* The Dow: 7700

* The Nasdaq: 1450

* The S&P 500: 750

Tip Sheet:

* Hot stock: Ballard Power Systems (BLDP)

* Hot sector: basic materials

* Next big thing: Costa Rican real estate