Farming and portfolio management are more alike than you might think. There are times to buy stocks, and there are times for sowing seeds. There are times to sell stocks, and there are times for reaping harvests. Just as a good farmer knows when his crops are ripe, a successful money manager knows when an investment has reached maturity.

Ron Muhlenkamp was raised on a farm, and he applies the lessons he learned growing up to investing. He knows that different investments grow in different environments; he understands that not every planted seed will bear fruit. This philosophy has helped him consistently outperform the market over the long run.

Since graduating from Harvard Business School in 1968, Muhlenkamp has devoted his professional life to portfolio management and the study of investment philosophies. In 1977, he founded Muhlenkamp & Company, and he launched the no-load Muhlenkamp Fund in November 1988. At its height in 2005, the fund had more than $3 billion in assets under management.

Muhlenkamp Fund

Expense Ratio

1.18%

Assets Under Management

$743.7 million

1-year return

23.8%

5-year annualized return

(1.1%)

10-year annualized return

5.6%

Source: Morningstar.

Top Five Holdings
As of Sept. 30, 2009

% of Net Assets

Bank of America (NYSE:BAC)

6.49%

Cisco (NASDAQ:CSCO)

5.81%

General Electric (NYSE:GE)

4.67%

Philip Morris International (NYSE:PM)

4.61%

Oracle (NASDAQ:ORCL)

4.28%

Source: Muhlenkamp Fund.

Recent musings
Muhlenkamp is a long-term investor. But he's facing the same challenge as many other investors right now: His crystal ball is clouded by the unorthodoxy of current markets brought on by recession, bailouts, and regulatory changes.

Depending on your perspective, Muhlenkamp lists three ways to look at the recession. From an economist's standpoint, the recession is probably over, technically speaking. But as Muhlenkamp observes, "By the media's implied definition (GDP is still well below its prior peak and unemployment is well above its prior trough), the current recession will last a while, as it always does." In other words, ordinary people don't believe that things are looking rosy just yet.

From a long-term perspective, though, the recession has already given Muhlenkamp what he wanted: a chance to buy quality stocks on the cheap.

Regulatory environment
But smart investing isn't just about when the economy will really recover. Investors also need clarity on what types of regulation will apply going forward, as well as how and when government bailouts and other programs will get phased out over time.

As Muhlenkamp puts it, "I don't believe anyone can state what the tax rules will be a year from now or what the regulations will be on companies providing health insurance or carbon dioxide emissions." And even a year after the height of the financial crisis, both businesses and investors seem to be delaying major investment decisions until they see Washington's next move.

Meanwhile, major issues like environmental legislation and health-care reform continue to linger without resolution. Until we're presented with some clear rules, some new start-ups won't start up, and existing businesses may put expansion projects on hold.

Bailouts
Muhlenkamp acknowledges that some of the bailout funds provided to financial institutions have been returned to Uncle Sam with interest. However, he also points out that, as expected, other programs are taking a bit longer to resolve. The real recovery will be within sight once we have a timeline for government intervention to end.

Yet Muhlenkamp sees the opposite happening. "Inexplicably," he points out, "some Congressmen are back to pushing for subsidies to help more low-income people buy too much house."

Many people hoped that the bailouts would end -- and that, at the very least, our elected officials would refrain from repeating the same mistakes -- once the damage from the financial crisis had been field-dressed. Apparently, bad habits are hard to break. As long as social policies tread on the idea of a free-market economy, they will add elements of uncertainty to our markets.

Financial markets and you
Muhlenkamp wants to see consumer savings grow and consumer spending shrink. If consumers reverse their spendthrift ways for good, savings will grow, which would spur growth in the financial sector. In his view, "Savings are necessary to weather the normal swings of economic life and the unplanned emergencies which are part of that life."

Muhlenkamp's fund has a strong position in financials and technology, but it also hedges its bets with energy stocks such as Chesapeake Energy (NYSE:CHK) and CONSOL Energy, as well as health-care giant Pfizer (NYSE:PFE) and mid-cap medical device maker Kinetic Concepts. That's certainly consistent with the idea that as people save more in the future, they'll focus their spending on the things that matter most.

The end of the consumer-led economy?
Whether that happens or not is the big question. Americans haven't had great savings habits in recent decades. A lot hinges on whether consumers will have the discipline to follow through with convictions to act more responsibly with their finances in the long run.

If they don't, spending will grow, and consumer-related stocks will likely do well for a while. But Muhlenkamp believes that Americans would be exponentially better off down the road if they practiced saving more and spending less -- and he thinks it's something you should also think about when making your own investment decisions.

In future articles, I'll be looking at other money managers in my ongoing search for useful investing tips. Next time, I'll take a look at what PIMCO's Bill Gross has to say on California, American discipline, and doggie bags. Stay tuned!

Further reading:

Chesapeake Energy and Pfizer are Motley Fool Inside Value picks. Philip Morris International is a Motley Fool Global Gains selection. The Fool owns shares of Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Chris Jones owns no shares of any company mentioned in this article. No, no, no. We prayed to Shiva to help us find the stone. It was Shiva who made you fall from sky. So you will go to Pankot Palace... and find The Motley Fool's disclosure policy ... and bring back to us. Bring back to us. Bring back to us.