MORN) has gained 63% during the past year. The portfolio has lost 1% annually, on average, during the past three years, beating 74% of peers. Welcome to TheStreet's Fund Manager Five Spot, 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? Crane:A bit of both. There are some long term macroeconomic issues that are disturbing. It is clear that the burgeoning federal deficit and debt is not sustainable. Several states have serious fiscal problems as well. The risk of inflation as a result of either policy or structural supply constraints is real. There will be a reckoning day, but maybe not anytime soon. I'm not so foolish as to think that I can predict when that is, or even when the market will refocus on these issues. It's not all doom and gloom however. In our fundamental research, we are still finding compelling investment ideas and themes. The recent economic turmoil has created opportunities for the better-managed, healthier companies. And there's still quite a bit of cash on the sidelines. What is your top stock pick? Crane:It's difficult for me to choose just one. A current favorite theme of mine revolves around the digital distribution of media content. This industry is in an incredible state of revolution. Consumer preferences are changing as these new technologies are available and affordable. Every few days there is a new development, a new deal signed, more content made available and so on. The disruption is creating many opportunities. We have several investments that benefit in different ways from this trend: Netflix ( NFLX), IMAX ( IMAX), Lions Gate Entertainment ( LGF), TiVo ( TIVO) and Akamai Technologies ( AKAM). What is your top "under the radar" stock? Crane:I'll point to an entire sector in this case. It is probably hard for most people to remember that it was only about 18 months ago when oil hit $147 a barrel. Stories about skyrocketing gasoline and oil prices dominated local and national news media. The recession resulted in lower energy demand, and the prices came back to a "normal" level. We can debate about the pace, but the domestic economy is recovering.
The incremental demand from some of the emerging economies around the world is coming back. It is hard to dispute the fact that there are long-term structural constraints on how much oil we can pull out of the ground. Today, gasoline is still just about the cheapest liquid you can buy. That's a remarkable fact considering not only the utility it provides, but also the capital that goes into finding it, producing it and distributing it. There will be another energy crisis, and it's not as far away as most people think. As a result, we're overweight energy stocks. Is there a theme to your investing process? Crane: When I look across our portfolio one of the common characteristics among many of our investments is some technological innovation. Technology is behind our digital media theme. Some of our alternative energy investments are essentially technology stocks. Even within health care, some of our favorite investments are the software and IT companies. We love finding companies with catalysts and positive inflection points, and the tech sector is replete with opportunities. What sector or stock would you avoid? Crane: For the moment, we have been staying away from hospitals and managed care until we gain some visibility on the effects of reform. We also don't have exposure to any gaming stocks either. That being said, we're in the business of always reconsidering those opinions. -- Reported by Gregg Greenberg in New York.