Even though U.S. stocks are in the sixth year of a bull market, and the Standard & Poor’s 500 stock index is tickling its record highs, Oakmark Funds portfolio manager Bill Nygren says he’s not worried about equities being too elevated.

Memories of the 2008 market’s swoon caused by the global financial crisis still has some people scared, but he said stock market drops like that happen only once every 50 or 60 years. But he did have a word of caution for more skittish investors.

“If you think a Great Recession like we had seven years ago will happen every decade, then you don’t want to own stocks at this level,” said Nygren, who spoke Thursday at the Morningstar Investment Conference in Chicago.

He said large, quality companies remain attractive and are not overly priced at current levels as valuations are tight. Few stocks trade with price-to-earnings ratios either in the single digits or more than 25, he said.

“[For] high-quality companies with long tailwinds, the market is not asking for too much of a premium,” he said.

Steven Romick, co-managing partner of First Pacific Advisors, agreed with Nygren––up to a point.

“Low rates have perverted capital allocation,” he said. “Everything is more affordable at low rates. Right now things are not expensive. If rates go up, and we are at generally low interest rates, then it’s a different story.”

When interest rates rise, Romick said he would avoid highly leveraged companies.

Both Nygren and Romick like bank stocks, and think investors are unfairly punishing them. Part of that view stems from investors getting burned by holding bank stocks during the Great Recession, but also because there’s a fear that new regulations put on banks regarding capital requirements may cause unintended consequences.

“One fear is that the industry will be so heavily regulated that banks will turn into the electric utilities,” Nygren said. He noted banks tend to trade at book value per share of 80 to 90, while utilities trade closer to 150.

“If banks are like utilities, investors haven’t priced them that way,” he added.

Romick said banks are complex and investors discount that, but he said they’re willing to be patient with their bank holdings.

The two well-known stock pickers hold different views on energy stocks. Nygren bought energy-exploration company Apache and Chesapeake, the second-largest natural gas producer. Both have more exposure to crude oil and gas prices than other energy companies, which could benefit them if crude-oil prices return to $80 a barrel. Currently, crude-oil prices are around $59.

Romick said the energy sector doesn’t interest him, adding that “many energy company destroyed capital for many years.”

Regarding greater investor interest in passive index investing versus active management, the two portfolio managers said passive investing has its good points.

“Professional investors underestimate what a great competitor the index is,” Nygren said. “But I don’t think that active investors are destined to underperform.”

Romick said human nature helps skilled stock pickers. “As long as there is fear and greed, there will be the ability to time arbitrage,” he said.

Active value managers can outperform in a downturn, he said, which “allows our clients to make more money” as long as investors have the discipline to stay in the market during a downturn.

It’s the discipline that makes the difference in either style, Nygren said. Investors with long-term horizons and discipline “will always have the advantage over the short-term investor,” he said.