Bill Nygren: Investors Get Excited At Precisely The Wrong Time

Johnny HopkinsBill NygrenLeave a Comment

In his recent interview with CNBC, Bill Nygren explains why investors get excited at precisely the wrong time. Here’s an excerpt from the interview:

Nygren: Yes the market is coming to us [value investors], and we think there are a lot of very cheap stocks out there right now. But unfortunately investors tend not to get as excited about adding to their portfolios when the market is down, so we we aren’t being flooded with new money to take advantage of these opportunities.

We always encourage investors to revisit their asset allocations and consider rebalancing portfolios. If you haven’t touched your portfolio since last fall, cash is a much bigger percentage of that portfolio today than it was then, and we think it could be a good opportunity for people to put more capital to work.

We’ve been through a lot of this over the years together. Oakmark started in 1991. This is the sixth bear market that Oakmark has been through. We aren’t market timers at all. It’s a skill set we don’t have, we don’t think many people do.

But over that thirty year plus period the S&P’s up over twenty-fold and by buying out of favor stocks when nobody else wants them, we’ve been able to do almost twice what the S&P has. So we don’t think this is at all a time for panic.

You can watch the entire discussion here:


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