Pzena likes market given current level of rates

• 'Skepticism about equity markets remains high," says deep-value investing giant Richard Pzena. Given the level of interest rates, the S&P 500 would have to rise by about 15% just to restore the historical equity risk premium. Put another way, the 10-year Treasury yield would have to rise to 3.8% vs. 2.5% today for the current level of the S&P to make sense.
• Think the market should go down? By Pzena's calculation, the 10-year Treasury yield would have to jump to 5% to justify a S&P 500 10% lower than it is now.
• What about value? Even five years since the end of the financial crisis, value stocks still have double-digit expected returns going forward if value spreads return to their norms, he says.
• Pzena Investment Management (NYSE:PZN) Q3 earnings call transcript.
• S&P 500 ETFs: IVV, SPY, VOO, RWL-OLD, OTC:SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB.
• S&P 500 value ETFs: SPYV, IVE, RPV, VOOV, FTA.