"I cannot say what the catalyst will be, but valuation is like gravity ? it is a principal influence on markets, it will assert itself," he said. "The disparity between fundamental value and price was stretched once before, after the technology crisis ? I see an opportunity of that scale now."
Mr Woodford defended his portfolio, which has been accused of being defensive and overweight in pharmaceuticals.
Far from agreeing, Mr Woodford said he planned to increase his this sector and that the investment world focused too heavily on the negative press about pharmaceutical companies.
"The valuations are so depressed that, even if you ignore all potential future patents and only consider the existing products the pharmaceutical companies have, it is still a good investment opportunity."
Speaking about the British economy, Mr Woodford said he believed that the Coalition Government had been "brave" with its fiscal measures, but that the Chancellor's predictions for growth were too optimistic.
"We won't see a Bank Rate rise this year. To do it now would crush the consumer," he said. "The next few quarters will be a weak period for the UK economy, and that will diffuse the appetite for interest rate rises.
"I am cautious ? I do not see growth coming through at the rate the Chancellor expects, so we won't see Bank Rate rise for a while."
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