Bear-Bull Hybrid Is Beating the Market

Wow!

Earlier this week, when I looked at how the top fund managers were doing this year, one name leapt out: Bob Rodriguez.

The veteran value manager at (FPPTX Quote)First Pacific Advisers' FPA Capital (FPPTX) came into the year as a growling grizzly bear, braced for a slump and holding more than 40% in cash.

So you'd expect him to be trailing badly as Wall Street has boomed instead.

The reality? He's whacking the cover off the ball.

With one week left of the first half, the market -- as measured by the Standard & Poor's 500 index -- is up 6.2%.

Bob Rodriguez: 14.2%.

Even while keeping nearly half his fund in cash. That's like beating Wall Street with one hand tied behind his back.

How's he doing it?

One word: energy. Rodriguez boldly held on to his big energy holdings during the sector rout last autumn. That cost him a market-beating performance in 2006. But they've come good since, in spectacular style.

"The firm benefits from its large stake in energy and energy-related stocks," he tells me. "These are up anywhere from 30% to 100% since last fall."

His big winners were mainly in the oil drilling and drilling equipment industries. They included Ensco International (ESV Quote), Rowan Companies (RDC Quote), Patters-UTI (PTEN Quote) and National Oilwell Varco (NOV Quote).

Rodriguez remains an energy bull. He thinks world oil production is peaking and the price per barrel is headed above $100 sooner or later. "In our opinion, the era of cheap oil prices is over," the fund manager says.

To watch Brittany Umar's video take of this column, click here.