With the market up more than 60 percent from its March lows, many investors are fretting that it s getting harder to find bargains. But that doesn t seem to be a problem for the four money managers who gathered for lunch at this year s SmartMoney Annual Investor Roundtable. There s lots of stuff to do, Amit Wadhwaney, portfolio manager of the $1.3 billion Third Avenue International Value fund, tells us as SmartMoney s eighth annual roundtable gets under way. Even after the great rally of 2009, he says, plenty of stocks haven t had a big move.

Wadhwaney, 55, who has made a fine living for the past 26 years going against the grain with his investments, went on in great detail to relate the bullish case for his picks, including a little-loved timber company and a little-known Canadian grain distributor.

The other roundtable participants each with at least a quarter-century of investing experience didn t exactly go for the conventional in their picks either. In fact, they plucked some of their favorites from such out-of-favor industries as trucking, auto parts and health care. And while they weren t exactly eager to pinpoint a target for the overall market in 2010, they had good things to say about the near-term outlook. We think the recovery will probably be stronger than people think, says Linda Duessel, equity market strategist for mutual fund giant Federated Investors.

But what about the long term? Can growth continue beyond 2010? Should we care about the budget deficit? (Hint: My stocks have better balance sheets than the government, says Jeff Cardon, portfolio manager of the $800 million Wasatch Small Cap Growth fund.) And are new taxes coming our way to pay for all that federal spending? To be fair, says Joseph Axtell, portfolio manager of the DWS Global Opportunities fund, if the government hadn t spent all that money to rescue the economy, we wouldn t be having lunch today. (Or maybe not at New York s 21 Club.) With that, they dug into their roasted organic chicken, potatoes, asparagus and chocolate hazelnut bombe and topped it all off with their welcome dose of optimism, at least for the time being.

SMARTMONEY: What did you learn from the experience of watching everything go over a cliff in late 2008 and early 2009?

JEFF CARDON: In the 29 years I ve been managing the small-cap growth fund, we ve always just focused on five years out. When we buy a company, I m thinking, Will these guys be around in five years, and will they be more prosperous? The Internet bubble is the classic example of this, when the market started liking fake growth companies. It really sucks the air out of anybody who s investing in the quality stocks. But the nice thing is, when markets are imploding like they were in 2008, and we know that 80 percent of our companies don t have any debt, we re not asking questions like, Will they be around in six months?

AMIT WADHWANEY: If you were investing in Asia in 1997 through 1998, you experienced something very similar. A lesson is how there are cash-rich companies out there that do not need access to capital markets and external financing. And when they decline with the rest, you have a great opportunity to buy them cheaply.

SM: What about this rally?

LINDA DUESSEL: If you keep your emotions out of it, you ll ask yourself, Am I a long-term investor? And if I am a long-term investor, I will peel into this market. Many of our clients say, The market is already up 60 percent [from its lows]. Should I get invested? We say: So what? An investor should not try to be a day trader. Up 60 percent from Armageddon means nothing.

WADHWANEY: A number of things have been repriced. On one extreme are the Asian markets, the China-related securities, the India-related securities. On the other extreme are European finance companies, the dull stalwart insurance companies. They haven t really been repriced to any significant degree.

SM: We ve seen government take unprecedented actions around the world. What are the implications in 2010 and beyond?

JOSEPH AXTELL: I m always looking for the next bubble. This rise in commodities is a function of the liquidity out there [from government stimulus]. I hope we can come up with a reasonable way to withdraw some of that liquidity, because I fear that maybe we re setting ourselves up for a repeat of 2008. I would hope that [government] would use that capital to create productive assets, to improve the electric grid and build bridges, roads and tunnels.

DUESSEL: When we came upon a potential complete financial meltdown, the government stepped in and said, We declare war on this, which is what they needed to do. However, we have gotten past that, and the future looks very, very tough. The American public doesn t have a clue what trillions in deficits mean to them. I strongly believe the value-added tax is in our future. The hole is so big that it s not just the wealthy people who will suffer big tax increases. I fear it will change the dynamics of our country for a very long time.

WADHWANEY: Resources have been flung to stop the downturn in its tracks. It s not just the U.S. doing it; it s the entire world doing it. Interest rates have dropped to such unprecedented levels, I think [economic] surprises like increased consumption will be on the upside. But this is a short-term thing because the piper is going to have to be paid at some point, and all this does is postpone the unpleasantness. With so much money available, we have the increased probability of inflation.

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SM: You saw a downturn in your portfolios and then a huge run-up. How are you positioning your portfolios now?

CARDON: It s going to be a no-frills economy. The traditional place you would go to get safety was U.S. government bonds. But look at the government and its balance sheet. My stocks have better balance sheets than the government by a million miles. The vast majority of our companies don t have any debt, and they throw off free cash flow. But if you go back into our 30-year history and see where we made the most money, what s really fascinating is that good management is a better indicator than these statistics. Management ranking doesn t pop out from a database so it doesn t get priced in as easily to the market.

DUESSEL: The top-end consumer got hurt the worst in his portfolio, and he s the one who is now seeing potentially new highs, so that s something very positive. Someday we re going to look at each other and say, I don t know what we were so worried about. But the red flags are the announcement of a tax hike and higher interest rates.

AXTELL: The powerful rally since March makes me wonder, what happened? Have we really fixed everything? But fair disclosure: I am positioned for continued growth in the economy, which I think can easily continue for the next six to 10 months.

WADHWANEY: Let s say we re going to be sellers of things that will be expensive, and otherwise, we re just going to buy and we re going to sit. We do a lot of sitting.

SM: What stocks look attractive into 2010?

DUESSEL: For 2010, we re looking at consumer discretionary and technology stocks. Microsoft (MSFT) had an enthusiastic response to its Windows 7 rollout, has potential in its search business through its partnership with Yahoo and has new religion in cost management. Another is Yum Brands (YUM), the best consumer play on China. Yum s Taco Bell value concept works really well in the U.S. I like the bean roll-ups myself. There s a big opportunity to take the brand international.

Another choice is Magna International (MGA), the auto-parts supplier. Inventories have diminished from the Cash for Clunkers program, and U.S. auto production is expected to rise in 2010. We don t need to pick a winner among auto companies: If I have Magna International, I ve got parts!

CARDON: I m looking out five years, so I have no sense of what these companies will do next year. But the thing all these companies have in common is that there s a growth opportunity and they are all really well run. Heico (HEI) manufactures jet-engine parts that save its airline customers 25 percent. They have a less than 5 percent market share in this business, and I think that could go up to 25 percent.

Knight Transportation (KNX) is a trucker we ve owned for more than 10 years. If you look at its growth and profitability, it just wipes the competition off the map. Knight has no debt, and it s one of those companies that just grows. MSCI (MXB), the international index company, has a great business model and roughly 35 percent operating margins. As capital moves globally, MSCI is sort of a toll booth on that theme. In 10 years, these guys are going to be around.

AXTELL: Schweitzer-Mauduit International (SWM) makes cigarette paper that s slower to ignite and less likely to start fires. It s being mandated by states across the U.S., and Europe should follow. It also has a promising product using discarded tobacco leaves. FTI Consulting (FCN) advises on corporate restructurings and offers 20 percent expected growth. It has moved into businesses that will do well in a recovery, such as advising on mergers and acquisitions. FMS Medical Care (FMS) is a German company that specializes in dialysis care for a steadily growing population. It s trading at about 14 times expected earnings for the next couple years and should have at least 13 percent annual growth.

WADHWANEY: United Microelectronics (UMC), a Taiwanese semiconductor foundry, recently reported its best quarterly earnings in two years. UMC and Taiwan Semiconductor have similar clients and are among the few companies in the industry that consistently generate excess cash. Canadian grain distributor Viterra () (VT.TO), which is traded on the Toronto Stock Exchange, has merged with Australia s ABB Grain. The probability of both countries having drought at the same time, while not zero, is not very large. Reducing the weather risk reduces the cost of capital. The combined company also has opportunities to increase margins.

Weyerhaeuser (WY), the forest products company, has always been too expensive to buy, but in the past 12 months, the demand for timberlands as an alternative asset has sort of dried up, and the industry has been flooded with supply due to Canadian overcutting. But home-building will recover, and supply will start drying up particularly from Canada and Russia. Weyerhaeuser is selling at around $40 and is worth $60 without engaging in tremendous amounts of financial engineering.

SM: There seems to be an undercurrent of longer-term concern over the economy and market. When should we worry?

WADHWANEY: The U.S. dollar exchange rate worries me. If the current policy continues, I think there s a reasonable probability that the U.S. dollar will [continue to be] under pressure. There s less and less reason for people to hold the U.S. dollar. One of my colleagues was in south India researching companies. Even the beggars were asking for Canadian dollars.

DUESSEL: We re not supposed to say, Put 50 percent of your money outside the U.S. But my compatriots who work on international portfolios have half their money outside the U.S. It s what you re comfortable with, right? It s a global economy. We who grew up in this business knew that emerging markets were more risky, we couldn t rely on their accounting, their politics were worse, and they needed us as consumers. Well, guess what? It s become better for them and worse for us.

AXTELL: I love being able to have the freedom to invest anywhere, and the end result is that you get better returns in a global fund with lower risk than you would in a domestic-only fund in the long run.