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Where Bill Miller is investing now

Noted value investor Bill Miller on Thursday said the stock market is "roughly, fairly valued" at 15 times earnings, and has all the ingredients of a bull market, namely economic growth, adequate liquidity and valuation.

So where is he putting his money?

Miller told "Closing Bell" there is "no question that we're at the beginning of a long home-building cycle." He likes builder Pulte Homes because he thinks it has a fairly decent valuation and is trading at a discount to the point it could go.

(Read more: Home builder confidence ends year on high note)

The famed stock-picker is also looking at J.C. Penney, which he thinks might be undervalued. After all, he said, there's "no reason" the retailer can't get its gross margins back to about 38 percent. But he acknowledged that it continues to face headwinds, including negative cash flow and increased competition from Internet retailers such as Amazon.com.

Named fund manager of the decade by MorningStar.com, Miller oversees The Miller Income Opportunity Trust, a fund overseen by LMM, an investment advisory firm co-owned by Miller and Legg Mason.

—By CNBC's Drew Sandholm. Follow him on Twitter @DrewSandholm.

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