“Value is relative to something else,” says Bill Nygren when asked where to find it in today’s market. Manager of the Oakmark Select Fund since 1996, Nygren offers his perspective in a recent interview with Investment News.

“In a period when you have short-term investments such as Treasuries with zero risk that pay zero, an average-risk equity that’s paying more than 2% a year in dividends and growing earnings 5% to 6% a year…. that’s a pretty attractive holding.” As far as where to find it, Nygren identifies the banking sector as “unusually attractive.” Banks, he says, are selling for 80% of book value, while utilities are selling for 150% of book.

Safety stocks, however, don’t interest Nygren. He argues that fixed-income investors have gone for “low-risk business models with limited growth that pay out most of their earnings through dividends.” He does have some appetite for oils stocks, however. While he believes global demand growth has been disappointing, he says that with oil going from $20 a barrel to $50, “we see supply and demand tightening. We think we have to be in the $60 to $80 range to make supply and demand meet. In the oil culture, bigger is better.”