Herro said, "The year has the potential of being a very good year for stocks. One really has to look at Japan. It's been the global equity market that has underperformed. That's one area geographically; one area from an industry perspective is technology. Technology shares have really lagged. In 1999, people were happy to pay 30, 40, 50 times earnings for some of these stocks. Now, many trade at 8, 9, 10, 11, 12 times earnings. They are still good businesses."
Herro manages the $6.9 billion Oakmark International Fund, which is almost a quarter invested in Japan. Herro has outperformed 97 percent of peers over the last decade.
Previously, Herro called Japanese stocks a "steal."
Herro thinks that the herd is focused on emerging market companies, resource stocks and energy needs. However, Japan is probably the most hated large market in the world as the country struggles with deflation and 20 years of stagnant economic growth.
At it's peak in 1989 the Nikkei was near 40,000 and traded at five times its book value, over 65 times its earnings. The fund's largest holdings in Japan are Daiwa, Canon and Toyota.