Roger Cass, The Last Optimist

Every morning at 5:30, Roger Cass gets up and checks the global markets. He reads the Wall Street Journal and the Financial Times. He surfs the Web, and tunes in to CNBC. Then he goes for a walk along Guadelupe Beach, minutes from his house in Santa Maria, California. Every morning, whether he's scanning the markets or the horizon, Cass is looking for the same thing: the waves. For the past 30 years, he has made a career out of studying them. In his world, the waves carry the message of the new economy. On them ride the first and fastest glimpses of what will come next, the future as it will unfold -- as it must unfold.

By studying the waves, Cass has compiled a perfect track record, predicting with total accuracy the big economic events of the past 30 years.

In the 1970s, when everybody said that the OPEC nations would hold the United States hostage to high-priced oil, Cass said that OPEC's power would fizzle and that the Saudis would enter decades of economic paralysis. He was right.

In the late 1980s, when everybody said that Japan's rise meant the eclipse of U.S. economic power, Cass confidently pronounced that the United States was one year away from its most robust economic recovery ever. He was right.

And as far back as the late 1970s, when everybody was still focused on the economy of the Organization Man, 30 years before anybody else had a glimmer of what would hit in the mid-1990s, Cass saw the new economy coming with the certainty of a wave headed for the shore. He named it as if it were a Hollywood movie, but it was really the most glorious wave of all: the Long Boom.

And what are the waves telling Cass today? True to form, the conventional Cassandras are declaring the end of the new economy and forecasting widespread economic disaster. But Cass isn't short for Cassandra. Where others decry the free fall of a "tech wreck," Cass sees only a "tech transition." The current rise in layoffs and fall of stock prices, he says, is merely an "interruption" in the Long Boom wave -- an interruption that he actually saw coming.

"At a meeting several years ago," says Jack Huber, 65, of Global Business Network in Emeryville, California, "Roger advised us that when the S&P 500 reached 1450, the party was temporarily over. I remembered that, and I watched with interest last year as the S&P edged past 1450 and then dropped -- along with the economy." To Cass, it's not a major problem. He believes that the United States is still in the early stages of a 27-year expansion that is so vast and so deep that, as he says, "we will experience not 100 years of progress in the 21st century, but the equivalent of 20,000 years of progress.

"This thing that we call the new economy, which is really the fifth new economy that the world has seen, is only 7 years old," Cass says. "It should continue for another 20 years." The waves tell him that this new economy is new, but hardly unique. Cass can track how it will behave, based on the other new economies that have washed ashore over the past 200 years. "This interruption will be over by 2002," he says confidently. "Maybe even as early as the second half of 2001."

How does he know? Remember that old cliché "The wave of the future"? For Cass, it's not a cliché. It's a fact.

What's the future got up its sleeve?

To prepare for a career as an economic seer, Cass took exactly one economics course: Economics 202: Introduction to Samuelson. It was enough to make him award the entire economics profession a grade of C-minus. Economists, Cass says, aren't humanists -- which is why they are so often wrong. "Economics has become the science of mathematical modeling," he explains. "But economic behavior is better studied through human history."

Originally from Britain, Cass studied history at the University of Cambridge from 1957 to 1960. He wrote his dissertation on Pope Gregory IX, a medieval church leader who managed to excommunicate his boss, Emperor Frederick II, from the Holy Roman Empire. It was an early lesson for Cass in how to topple authority. The project so inspired him that he learned Medieval Latin and German in order to get as close to the evidence as possible.

In that study, Cass captured an essential truth about change: The fact that Frederick II was excommunicated was big news in the 13th century, but it actually had little impact on the long-term future of the state. An event that happened in the present was rarely important enough to change the wave of history.

In other words, Cass learned an intensely calming lesson: Change is a vastly overrated concept. "Things don't change," explains Malcolm Tulloch, 50, one of Cass's colleagues who runs Tulloch Research, a London-based hedge-fund advisory firm. The way Cass sees it, the future only has two tricks up its sleeve: bigger and smaller. Good times alternate with bad times at predictable intervals. If nothing changes much -- if the fundamentals stay the same -- then you can actually see what's coming next.