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) 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), Rowan Companies ( RDC), Patters-UTI ( PTEN - Get Report) and National Oilwell Varco ( NOV - Get Report).

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 .

He had a few other winners outside of energy. Chief among them was Avnet ( AVT - Get Report), an electronics distributor. The stock collapsed in a profits warning a year ago. Rodriguez ran the numbers and decided Wall Street had badly overreacted.

Like any true value investor, when he bets, he bets big. Rodriguez threw 10% of his fund into the stock at prices starting below $17 a share.

Today? It's $41.75.

That's some return. Fortune favors the brave.

But then, Rodriguez is no newcomer to this game. He's put together a terrific long-term record at FPA Capital since the fund launched in 1984.

He's beaten the market by an average of six percentage points a year over 10 and 15 years, according to Lipper.

Six points a year.

That's even though he's behind during the boom of the last three.

As for opportunities out there right now? He doesn't see a lot.

If any.

"Just because somebody else wants to jump off a cliff doesn't mean I have to follow them," he says of this market. "I'm not a relative value manager, I'm an absolute value manager."

In other words, if he can't find anything really good to buy, he can sit on the sidelines and wait for better opportunities. Most mutual fund managers don't have that flexibility. They have to be fully invested.

Rodriguez's fund is closed to new investors, not because he had so much money flowing in, but because he cannot find productive investments for any more cash.

Rodriguez began 2007, as he had for some time, with a very bearish stance. Has that changed at all since then?

"I'm still very bearish," he says. "Even more so. I've been selling into this rally. We've done very little buying this year." He's selling 10 or 15 stocks for each one he's buying. The percentage of cash in the portfolio is in the low forties.

Rodriguez sees "signs of excess in many areas," and he's increasingly worried about the financial picture here in the U.S.

The fund manager thinks mortgage defaults are going to increase dramatically and the contagion will spread. Lending standards, he says, collapsed during the last few years of the housing bubble and the bill is going to come due.

He sees house prices continuing to fall. And he is concerned about toxic amounts that hedge fund and private-equity managers borrow to goose up their returns.

Rodriquez plans to scare audiences in Chicago next week, where he is due to give speeches to a Morningstar conference and a meeting of Chartered Financial Analysts.

"You never know when there's going to be a crash," he says. But his favorite investment right now? "It's a four-letter investment called cash."

In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.