Bill Nygren: The opportunities are in identifying the best businesses

Bill Nygren: The opportunities are in identifying the best businesses

In his letter to shareholders released today, Bill Nygren wrote that over the past five years most stocks that were undervalued have increased significantly while the stocks that were overvalued have significantly declined. The range of P/E's has narrowed so much that he believes the better values today are generally the superior businesses where the market isn't demanding significant P/E premiums. The opportunity in 2000 was to identify the best prices; today, he thinks more of the opportunities are in identifying the best businesses. The market is now much more reasonably priced, its P/E is about two-thirds of its 2000 level. He did not comment what he bought or sold this time…