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

8. Your fund is pretty tethered to the relative health of the consumer. Are you concerned about what will happen if the consumer stops propping up the economy?

I guess I am, yes.

But I've tended not to try to put a macroeconomic overlay on the fund. I feel I have more insight into valuations than a macroeconomic overview. If you buy at the right price, you're protecting yourself from any sort of economic hiccup. If you have markets decline, time will be your friend and you'll be able to wait for the economic recovery.

Yes, I am concerned about it, like so many other things, but I tend to monitor it more on a company-by-company basis and it seems to me that, coming out of the third quarter, things seem to be better than people thought. While people are wringing their hands over the economy, Corporate America's earnings reports coming out of the third quarter finagled the margin better than they thought they were going to.

Let's talk on a company-by-company basis, then: Tell me what you like about Countrywide(CFC Quote). Again, are you concerned at all about a declining housing market?

I'm concerned to the extent that they tend to be driven by a refinancing cycle and the refi cycle is slowing down. It's really interesting the way it works: The refi cycle puts a little business on the books, but when the refi cycle slows down it improves the retention rates of the business on the books. It's a cheap stock, it's a good business and they're an underappreciated company. Yes, I realize that there's more risk on the refi cycle. If that's behind us, that will slow their business down, but that's not going to happen for a long time now. The stock is staying cheap and they have to continue to get the numbers. So, I'm not really concerned -- every company has issues, but I think evaluation is cheap enough for us not to be as concerned about it unless the evaluation was higher.

What about Maytag(MYG Quote), another consumer stock? What's the growth potential here, and why doesn't the rest of the market see what you see?

That's a good question. The earnings came through well in the first half of the year, but then at the end of the year, things slowed down and, in the aggregate, earnings growth was quite strong. But what everyone focused on was: Oh my God, they missed the numbers at the end of the year so the stock got killed.