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McGregor on Pitfalls with 'Reversion to Mean'

Value investors have to be careful about reversion-to-mean theories when the mean itself is shifting, says Oakmark Equity & Income manager Clyde McGregor.

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Benz: So if you are feeling fairly pessimistic about fixed income, does that mean that you are finding relatively better values in equities? And you are a value investor, so I am curious to hear do you think that you are spotting good opportunities in stocks right now?

McGregor: One of my firm, Harris Associates, greatest investors from the past, unfortunately deceased, was famous for saying that the hardest time to invest is always right now. And that's the way it feels, yet, he would turn around and say, but okay, now what do we buy?

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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.