Five Spot: Bateman Buys Energy, Tech

Randy Bateman, manager of the $120 million Huntington Situs Small-Cap Fund(HSUAX Quote), says he's sticking with energy, industrial and technology stocks. He remains skeptical of consumers.

His fund, which is rated four stars by Morningstar, is up 8.8% this year, outpacing the 1.7% advance of the S&P 500 Index. Over the past three and five years, the fund has returned an average of 8.5% and 2.8% a year.

TheStreet.com's Fund Manager Five Spot is where America's top mutual fund managers give their best stock picks in five fast and furious questions.

Are you a bull or a bear?

Bateman: Yes and yes. We are somewhat bullish over the intermediate term up to a year or so. There are so many compelling reasons to be bullish at this moment. There is still $4 trillion or so in money market funds that have been accumulated as a result of fears over the perceived continuation of the economic crisis. This money has virtually no real after-tax yield and is merely a safe haven in a sea of uncertain economic times. There are virtually no attractive alternatives in the bond, real estate, hedge fund, private equity or derivatives markets that are poised to tempt this money into a more permanent situation.

Over the longer term, however, we fear that we may be going into a period much like the 1970s where there was no secular market uptrend. During the '70s, the 73 million-strong baby boom generation was entering its household formation period, a time when we know people spend more of their disposable personal income than any other time. Compare that with a similar demographic of 3 billion people in India and China that are rapidly building a middle class. The strains on world commodities are likely to ape that of the '70s in the U.S.