Right now, the Stratton fund has a diverse set of stocks. Among its top holdings is financial-services outfit Charles Schwab (SCHW), with a $25.6 billion stock-market value. He likes it both for its 18% earnings growth rate and its ability to snatch market share from retail brokers.

Lower on the market-cap ladder is electronic-instruments maker Ametek (AME), a diversified manufacturer with $5 billion in shares outstanding. Ametek stamps out unusual items like vacuum-cleaner motors. "They generate mid-teens growth out of a very dull business," he says. "They're proof that manufacturing of this sort can still be done in the United States."

Current favorites are natural-gas plays including Penn Virginia (PVA), Chesapeake Energy (CHK), EOG Resources (EOG) and XTO Energy (XTO). Stratton says natural gas is now the preferred fuel for electricity generation and that many of these outfits can boost earnings by 50% or more in the year ahead.

Current favorites are natural-gas plays including Penn Virginia (PVA), Chesapeake Energy (CHK), EOG Resources (EOG) and XTO Energy (XTO). Stratton says natural gas is now the preferred fuel for electricity generation and that many of these outfits can boost earnings by 50% or more in the year ahead.

Current favorites are natural-gas plays including Penn Virginia (PVA), Chesapeake Energy (CHK), EOG Resources (EOG) and XTO Energy (XTO). Stratton says natural gas is now the preferred fuel for electricity generation and that many of these outfits can boost earnings by 50% or more in the year ahead.

Current favorites are natural-gas plays including Penn Virginia (PVA), Chesapeake Energy (CHK), EOG Resources (EOG) and XTO Energy (XTO). Stratton says natural gas is now the preferred fuel for electricity generation and that many of these outfits can boost earnings by 50% or more in the year ahead.

A recent addition is computer-consulting company Accenture (ACN).

One stock he likes a lot is Mirant (MIR), an Atlanta electricity producer spun off from Southern Co. seven years ago. Mirant is a pure play on boom times for generators. "Mirant is one of the five merchant power companies around, and all it does is generate power and sell it on the wholesale market," he says. Its earnings are projected to rise more than 100% in 2008 and 21% in 2009. The stock trades at 11 times projected 2009 profits.