Bill Nygren: The bull has further to run

published 25 August 2017

Noted value investor Bill Nygren of Oakmark Select agrees that US-listed stocks are relatively expensive on some measures, such as the price/earnings ratio. However, he's not convinced that the market is as overvalued as some fear other metrics paint a very different picture. For example, "dividend yields as a percentage of corporate bond yields are higher than normal".

Also, "the economic growth outlook right now is positive" and "retained earnings are higher than average and are being put to use to delever balance sheets, increase dividends and repurchase shares". And in any case, "there are always reasons to be bearish and there are always reasons to be bullish".

He sees no point in worrying about overall market levels it's amazing "how many of our peers, who share our long-term belief that equities are likely to continue to be the highest-return asset category, believe they can enhance that return by figuring out those occasional periods where the equity market is at higher risk". During his own 25 years as a fund manager, shares have risen ten-fold despite "wars, hurricanes, global financial crises [and] oil-price collapse".

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Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.

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