(FORTUNE Magazine) – Morris Smith, 28, manager of the 15-month-old Fidelity Select Leisure & Entertainment fund in Boston, calls his $73-million portfolio the ''fun fund'' for short. But he defines fun in the broadest terms imaginable. A company is his target if half its revenues, assets, or earnings are related to goods or services consumed in the customer's leisure time. That gives Smith free rein to bet on products as diverse as children's dolls, newspapers, gambling casinos, and airline travel. The fun fund's performance accounts for Smith's cherubic smile. Fidelity Select Leisure was up 60% in the 12 months that ended June 30, far outdistancing Standard & Poor's 500-stock index. In a recent interview, Smith told how he hopes to go on maximizing investors' enjoyment. Excerpts: What have you bought recently that still looks like a buy? I have been very bullish on the cable TV industry, where the fund has large holdings. Haven't a lot of operators paid too much for their franchises? And haven't profits been disappointing? The public perception of the cable industry is completely different from the fundamentals of the stocks. Operators in some big cities have had major problems. But most cable systems are in the suburbs and have been very successful. Are the urban problems hurting the suburban companies' stocks? No, they have done well. A year ago many were trading at less than half their private market value -- what they could be acquired for. Now most of them are trading at roughly 80% of their private market value, but I think those values are going to grow more than 15% a year over the next three years. The growth rate in cash flow for a cable company should be much faster than the growth of earnings throughout the economy. Which companies are best positioned to rake in profits? I own Tele-Communications Inc., based in Denver, the largest cable operator in the country. Because of its size it has a lot of clout in getting price concessions from program suppliers. Another holding is Comcast, a medium-size operator based in suburban Philadelphia. Any others? I also own Rogers Cablesystems, which operates in both the U.S. and Canada. It's in a turnaround situation. In what way? For one thing, the new Conservative government has allowed some reasonably . large rate increases. What companies look attractive in the leisure goods industry? I have a large position in Brunswick, the old bowling ball company that, among other things, owns and equips bowling centers. With the slowdown in the economy in the last year, most of the leisure goods manufacturers have come on hard times. Brunswick is the only one whose earnings haven't fallen apart. Other makers of boat engines, for example, are having a difficult time, but Brunswick's marine division is doing very well. The company has diversified, and some of its other businesses are growing at accelerating rates this year. Even the bowling centers? Brunswick is building new ones in the Sun Belt and moving slowly out of the Northeast and Midwest. That's not the most attractive part of the company from an investment standpoint. But this is a plain old-fashioned cheap stock. I expect Brunswick to earn about $5 in 1985. The stock is selling at $37, or a little bit more than seven times expected earnings, compared with the market's price-earnings multiple of 11. And the company is going to earn 20% on shareholders' equity this year. Are there any new leisure trends that could pay off for investors? The amount of money that is being spent for exercise equipment is impressive, but there's no pure play. Most of the companies are subsidiaries of larger companies. How important are restaurants in your portfolio? They're about 12% of the fund right now. One stock I own is Sizzler Restaurants International, a budget steakhouse chain that has boosted revenues by upgrading itself. Do other eateries appeal? International King's Table, a smorgasbord operator in the Western states, has had a significant turnaround since the late 1970s. The controls this company has established are incredible. If you're running a smorgasbord, you can have tremendous waste, but International King's Table knows pretty closely how much food is going to be used each day. The company earned around $1.50 a share in its last fiscal year, and I'm projecting $1.75 to $1.80 for the current fiscal year. The stock is very reasonably priced. What else looks good? Dunkin' Donuts is a wonderful operation, with earnings per share that grow more than 15% yearly. It keeps adding outlets and products, including a croissant this year. Are you in games, or kiddie stuff? I own Mattel and Hasbro Bradley and they've been wonderful stocks. Mattel bombed in electronic games. Yes, but now it's back to being a basic toy company. Coleco Industries is still hot because of Cabbage Patch dolls, but Mattel and Hasbro are both increasing market share. Is the toy market growing? I wouldn't call it a baby-boom era, but it's a lot better than it was ten years ago. I hate to say it, but the increased divorce rate has helped. You've got two parents who have to give gifts instead of one couple.