While the rest of the investment world seems to be shunning Japanese stocks and large-cap stocks, two top fund managers — Oakmark’s David Herro and Bill Nygren — say that’s where they are finding value.

“We’re fully confident that our Japanese stocks will become a positive at some point for the fund — who knows when,” Herro told the Associated Press in reference to a fund he and Nygren co-manage. “Japan is the cheapest among the developed markets. Dividend payments are rising in Japan, and corporate performance has improved. Foreigners don’t care. Japan is kind of depressed. The yen is strong against the dollar. At some point, these things will ease up, and people will rediscover Japanese stocks.”

Herro says there are two real risks to that scenario: 1) a continuing strengthening of the yen, and 2) the trend of Japanese firms putting their cash holdings to work, rather than sitting on them. “If that reverses, then all bets are off,” he says.

As for large caps, Nygren says they are cheap. Very cheap. “Domestic large-cap is the most hated space now in the investment world,” he says. “Small-caps have done better lately, and we think the value of large-cap has become more compelling. It’s rare to get to the point where we are today, where you have to pay a big premium to buy a small-cap stock, based on price-to-earnings ratios. You’re giving up the strengths larger companies have: liquidity, scale, a global platform and greater access to capital markets.”

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