Hedge fund manager David Neuhauser’s fund has beaten each the S & P 500 and the Dow Jones Industrial Regular so significantly this yr. The Livermore Partners’ “particular problem” hedge fund is up more than 10% in the yr to date, he advised CNBC on Thursday. Meanwhile, the Dow is up 1.6% and the S & P 500 is up all around 7% as of Wednesday’s near. He shared with CNBC’s ” Road Indications Asia ” on Thursday some recommendations on what to invest in and prevent in present day volatile industry. Electricity and gold Neuhauser said smaller-cap strength shares are driving the fund’s outperformance, naming 3: Jadestone Electricity , Kolibri Worldwide Power and Vista Strength . Of the 3 stocks, Kolibri has completed the greatest, rocketing 71% this yr, while Vista Electrical power is up nearly 50%. That will come as oil prices rose this week soon after a surprise OPEC+ oil output reduce declared in early April. He also named gold as a single of the greatest asset lessons to personal proper now, given tailwinds this sort of as a weak dollar and geopolitical challenges. “We have found such an below investment in the (oil) place for the past 5 to seven many years. So to me, even withstanding a recession. I imagine crude price ranges are in a seriously strong band,” Neuhauser reported. “If we skirt a further economic downturn, then … demand from customers is heading to shock us to the upside. And then you can see commodities essentially run a fair bit a great deal a lot more than say 20% to the upside on a range of commodities names, primarily oil, and even on the lookout at some precise situations within just the gold sector,” he included. A ‘luxury playbook’ Neuhauser explained he also has a “luxury playbook.” “Mainly because if we are erroneous in conditions of recessionary fears, and it truly is not that deep and protracted, then I think some of these luxury sectors are likely to retain their margins and do fairly superior,” he mentioned. Livermore owns luxurious shares these types of as LVMH, Ferrari and clothing retailer Canada Goose Holdings . Also as a hedge, Livermore is small on Tesla and the U.S. greenback , explained Neuhauser. Avoid tech Neuhauser mentioned he thinks the financial system is however in stagflation and a bear market place is “continue to at enjoy.” He pointed out that in the past three months, a amount of major tech organizations have had layoffs and cost-chopping initiatives. “That of program keeps the hold in margins for the future say six to 9 months, and these inventory price ranges begin to react. So that is why all those stock price ranges are up, you know, 20%, 30% from the 12 months get started,” he explained. The Nasdaq is up just about 15% so far this yr as of Wednesday’s close. The corporations are “perfectly insulated” with income, but when investors search at the outlook for valuation and growth right up until 2025, they’re likely to be “severely disappointed,” he stated. Additional draw back is ahead, and that’s not going to “seriously hit the marketplace” for one more three to six months, Neuhauser claimed. “In the in general index market place, I would not be a extended … but now which is exactly where the industry is looking at value. And I believe which is likely to confirm to be an mistake,” he told CNBC.