10 Questions: At Charles Bath's New Value Fund, There's No Room for Tech

5. According to Morningstar, you have no holdings in software, hardware or telecommunications. Do you think the run-up in these sectors this past month is misplaced?

About a month ago, some of these stocks had been down so low that they were close to our target prices. But then the market took over so fast, we sort of missed them, but now they're up 50% (laughs). Yes, I think that's the case. I mean, 50%, if you think about it, maybe in the 1990s that was somewhat normal.

I think that if you can make 50% over four years, then that's pretty great. In tech, we've made that in four weeks now. I think that these stocks have gotten ahead of themselves now. They don't appear to be the market leaders to me. Bear markets tend to define changes in leadership. I tell people I don't know where the next leadership of the bull market is, but I think I know where it's not going to be (laughs). That's a group I'd like to participate in at the right price, like any other group. It never got to my price before it took off. So, I'll be waiting again until it does get to my price.

One tech-oriented company you own is SunGard Data Systems(SDS Quote). What do you like about the company?

The best part of the business is the corporate security and data security. They provide off-site security systems for corporate-data centers. They're a leader in that business. It's a growth business and generates lots of free cash flow with the management's ability to manage that cash flow.

I owned the business in the past and I've liked it. The stock got very cheap in this most recent sell-off, but it's running back quite a bit recently.

The technology space has often led to the services business because they tend to participate in the growth of the industry, generate more free cash flow and more steady, less cyclical growth than, say, the hardware names.

Plus, they're a very well-positioned and well-run company.