Stock prices have come down very dramatically across all sectors and 5-year returns for long-term investors today are very good, said Bill Nygren, portfolio manager at Oakmark Fund.
“The stock market is very cheap, and I don’t think the government has an interest in being a long-term meddler in the economy,” Nygren told CNBC at the Morningstar Investment Conference in Chicago. “We’ll see them recede from their involvement.”
He said that the long-term outlook for stocks is “very, very favorable.”
Bank of America —“It’s still down 80 percent from where it was a couple years ago,” he said. “They’ve got a fantastic retail banking franchise and that’s the real reason why we own this company.”
Capital One —“They’re funded by a very large deposit base of retail deposits that’s very inexpensive. And we think those are vastly overstated liabilities on the balance sheets, making it a good hidden asset," he said. "We think credit cards are a good business—it’s something that the consumer wants and an economy needs. Over time, Capital One is going to earn a reasonable return.”
Time Warner —“AOL and Time Warner should have never merged. We like Time Warner because of the traditional media assets. We’re happy being a long-term investor in Time Warner,” he said.
No immediate information was available for Nygren or his firm.