Ryan Leggio: One metric that we look at, and other value investors look at, to get a general gauge of how the market is valued, is Shiller's Cyclically Adjusted P/E Ratio. Can you give us your thoughts on how relevant that metric would be for value investors, generally?
Bruce Greenwald: If you are going to go into the market indiscriminately--if you're an equity fund that has to invest only in equities--then you might want to look at that. But the thing is that that tells a gross general story.
At this time, there are particular asset classes--and certainly at First Eagle, what we're interested in, is the asset class that pays the best--that, relative to that average return, are trading at extraordinary discounts. That's these franchise businesses we've talked about.
I think you want to be cautious when that number is high. But you really want to look in detail at particular opportunities that the market presents. And that's what the Shiller Index won't tell you. And I think, as I say, at the moment there is this extraordinary rush for trash.
And so, even though the overall market may not be that cheap, there are these extraordinary stocks that are trading at prices that produce--I think it's fair to say--sort of fabulous long-term returns by historical standards, with relatively little risk of permanent impairment of capital. And that's what I think you always want to look at.