There are no reasons to be bearish about the U.S. stock market, value investor Bill Miller told CNBC on Wednesday.
The chairman and chief investment officer of Baltimore-based LMM Investments ran through a list of positives for equities, including moderate economic growth, low interest rates and low inflation. "But we also want people to take money out of stocks because they hate them, so they're cheap," he said in a " Squawk Box " interview. "That's exactly the environment we have today."
LMM, a partially owned subsidiary of Legg Mason, has $2.9 billion of assets under management.
If investors starting really pulling money out of bonds and putting it into stocks, Miller said, "my concern is the stock market starts going up 20 or 30 percent a year like it did in the late 1990s. And then after two or three years you can't make money on anything. I'm much more worried about that than the fact that the stock market won't go up."
Appearing with Miller, Brian Rogers, chairman and CIO of T. Rowe Price, said there are no real alternatives to investing in stocks, because money markets and treasury bonds are basically delivering no returns.
"There are really a lot of high quality companies selling at good valuations, good dividend yields, [and] not particularly expensive in today's world," he said. T. Rowe Price has $773 billion in assets under management.
Wall Street searched for direction Wednesday, with Europe and Asia in the red. The Dow Jones industrial average (Dow Jones Global Indexes: .DJI) snapped a seven-session winning streak on Tuesday.
As explanation for why investors are not really jumping into the market, Rogers said: "[They] are still frightened based on what happened in the global financial crisis. So there's still hangover from that. I think ultimately their risk tolerance will pick up and they'll come back in. But it's going to take time."
Echoing those sentiments, Miller said it took time for the conditions that created to the 2008 financial crisis to build up, and "generationally it typically takes a while for people to forget about things."
Miller is also the portfolio manager of the Legg Mason Opportunity Trust fund, which was down 3.23 percent for the year as Sept. 30, about half the decline of the S&P 500 (INDEX: .SPX) in that period. Over the past 12 months, the fund was up 3.45 percent. The three-year return was 25.65 percent, more than double the S&P.
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