Hedge fund manager David Neuhauser’s fund has beaten both the S&P 500 and the Dow Jones Industrial Average so far this year. He told CNBC on Thursday that Livermore Partners’ “special situation” hedge fund is up more than 10% year-to-date. Meanwhile, the Dow was up 1.6% and the S&P 500 was up about 7% to close Wednesday. He shared with CNBC’s “Street Signs Asia” on Thursday some advice on what to buy and what to avoid in today’s volatile market. Energy and Gold Neuhauser said small-cap energy stocks were behind the fund’s outperformance, naming three: Jadestone Energy, Kolibri Global Energy and Vista Energy. Of the three stocks, Kolibri is the best performer, soaring 71% this year, while Vista Energy is up nearly 50%. That comes as oil prices rallied this week after the surprise OPEC+ oil production cuts announced in early April. He also considers gold one of the best asset classes to own right now, due to favorable factors such as a weak dollar and geopolitical issues. “We’ve seen such underinvestment in the (oil) space over the last five to seven years. So for me, even if a recession hits,” Neuhauser said. think crude oil prices are in a really strong range.” “If we get through a deeper recession, then… demand will surprise us with a rise in prices. And then you can see commodities actually go up a bit more than a 20% gain. for some commodity names, especially oil, and even look at some specific situations in the gold sector,” he added. A ‘luxury book’ Neuhauser said he also has a ‘luxury book’. “Because if we’re wrong about the recession fear, and it’s not deep and long-lasting, then I think some of those luxury sectors are going to stay profitable and do pretty well,” he said. Livermore owns luxury stocks such as LVMH, Ferrari and Canadian clothing retailer Goose Holdings. As well as a hedge, Livermore said, lack of Tesla and US dollars. Avoid Technology Neuhauser said he believes the economy is still in a state of stagnant inflation and the bear market is “still going on”. He pointed out that over the past three months, several major tech companies have laid off employees and implemented cost-cutting initiatives. “That will of course keep the margins for the next six to nine months, and that stock price starts to react. So that’s why the price of that stock goes up, you know, 20 %, 30% since the beginning of the year,” he said. The Nasdaq is up nearly 15% year-to-date through the end of Wednesday. “Companies are “well protected” with cash, but when investors look at the valuation and growth prospects through 2025, they will be “heavily disappointed,” he said. Neuhauser said there will be more downside ahead and that it won’t “really hit the market” for another three to six months. “In the overall index market, I wouldn’t buy… but today, that’s where the market is seeing value. And I think that would be a mistake,” he told CNBC.