NEW YORK (CNN/Money) – They are two of the most widely respected money managers in the business. But they couldn't be more diametrically opposed when it comes to their views on the market and economy.

In one corner, we have Bill Miller, the Sultan of Stocks. Miller, the manager of the Legg Mason Value Trust, has beaten the S&P 500 eleven years in a row and is on pace to extend this streak to twelve. Still, Miller has lost money for the past three years as bonds have outperformed stocks. But Miller is confident that the bear market is over.

And in the other corner, we have Bill Gross, the Bearish Bond Baron. Gross runs Pimco Total Return, the largest fixed-income fund tin the world. Gross has averaged a double-digit gain during the past three years. He, not surprisingly, thinks that bonds are still the safer investment for 2003.

Here's a look at what these two managers, who are both part of MONEY Magazine's Ultimate Investing Club, are predicting for next year.

To call Miller an optimist is a vast understatement. Miller thinks that October 9, 2002, was the bottom for this bear market. He's not alone in this regard. But he is among the few who does not seem to be that concerned about the continued murkiness in the economy and the weakness in corporate earnings. In fact, he doesn't blame the economy or earnings for the market's poor performance in 2002.

CNN/Money's Paul LaMonica takes a look at gold, bonds and real estate as investments in '03. Play video (QuickTime, Real or Windows Media)

"I think the market would have bottomed on Sept. 21, 2001, if not for all the corporate scandals," Miller said at a Legg Mason conference in New York earlier this month, referring to the likes of Enron, Worldcom, Adelphia, ImClone, Tyco, et cetera et cetera. Miller thinks that the worst is over regarding instances of corporate fraud.

Miller is so confident that the economy will bounce back in 2003 that financial stocks remain the top sector in his fund. He's betting that an economic rebound will lead to an increase in demand for loans and a decline in bad debts and bankruptcies.

Overall, Miller seems to be a man of few worries. War with Iraq? No problem. "Stocks are factoring in a war. If we have a conflict, it is the best advertised conflict in history." Deflation? Overdone. "The Fed can create inflation any time they want by printing more money."

Miller does not expect big returns from the market next year but he thinks a fourth consecutive year of declines for stocks is unlikely. At this month's conference, he said he thought that stocks were about 10 percent undervalued.

Still, even though Miller is confident about 2003, he's quick to admit that his optimism has been largely unchanged throughout this brutal bear market. "I've been so wrong so steadily and so consistently, it doesn't bother me any more. I'm not sure what it would feel like to be right," he jokes.

Gross does not share Miller's enthusiasm for stocks. In September, he wrote in a market commentary, posted on Pimco's Web site, that the Dow could fall to 5,000. The Dow was trading at about 8,400 at the time, and is now trading at about 8300.

Since then, Gross has continued to question the valuation of the stock market. In his November commentary, Gross wrote that even using pro forma 2003 earnings estimates for the S&P 500 (which include many one-time charges), fair value for the S&P 500 appeared to be about 650. At the time, the S&P was at about 900.

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Gross, of course, remains a bond bull. In his November commentary, he scoffed at the notion that bonds might be nearing a bubble phase, similar to what happened to stocks in the late 1990s. "Inflation promises to stay low for some time, which supports 10-year Treasury yields at near 4% levels. On the other hand, stocks with their more than suspect pro forma earnings remain the bubblish investment to me," he wrote.

And while Miller seems dead certain that deflation will not wind up being a problem plaguing the economy next year, Gross is not so sure. He isn't predicting deflation per se but he thinks it's still a risk worth noting. "Despite the Fed's 'guarantee' to prevent deflation there is no assurance that they can create substantial inflation. Just ask Japan how that works," Gross wrote in his December market commentary.

Without inflation, corporations probably won't be able to regain pricing power any time soon. Translation: Don't expect earnings to increase that dramatically. And Gross does not expect the Federal Reserve to raise interest rates substantially higher. In his December commentary, Gross predicts that the Fed will raise interest rates by the end of next year, but only to about 2 percent at most. The current federal funds rate is 1.25 percent.

Taking all that into account, Gross is predicting more winning years for bonds ... but he does not think the future will be as good as 2002. "4-5% annual total returns at best over the next several years should be expected," Gross wrote in December.

Who will wind up being right? Check back on December 31, 2003.