Bill Nygren Thinks Stocks are Still Cheap

By on April 7, 2010

Oakmark Fund manager Bill Nygren believes investor pessimism is still at a high level and stocks are reasonably valued:

“Although it feels like we are in a different world from a year ago, investor pessimism is as strong as it was then,” says the well-respected value investor. “Yet if you take away financials, the yields in the stock market are unusually high compared to the bond market.” Equities, he notes, tend to outperform bonds over time, and that hasn’t changed.

SMA Comment: Nygren has a good long-term record, but demonstrated his fallibility as one of his favorite stocks before the bubble burst was Washington Mutual. He also touted other financial stocks and appeared to completely miss the housing bubble.

Source: Smart Money
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