Wharton finance professor Jeremy Siegel remains bullish notwithstanding others’ concerns regarding “the market’s potential reliance on Trump’s tax- and regulation-cutting agenda,” according to a recent CNBC interview. “What has driven the market further up has been the great earnings season that we had in the first quarter,” says Siegel, adding, “It was the best guidance, forward guidance, that I had heard in many, many years.” This, along with global growth, greater stability in China, a lower dollar and a dovish Fed, Siegel is optimistic even in the face of a stalled Trump agenda. That said, he also feels confident that […]
As the Dow continues to climb amidst conjecture by some around a possible market decline, Wharton professor Jeremy Siegel thinks investors shouldn’t avoid buying stocks, according to a CNBC article posted last week. The author of Stocks for the Long Run says that when investors “anticipate a significant drop—say, 20 percent—they typically do not consider the fact that the stock market may in fact rise between current levels and a large decline.” Even if they avoid buying, he says, they would be better off just sticking with current holdings. A second mistake investors could make, according to Siegel, is discounting […]
Twenty-two years ago, Wharton professor Jeremy Siegel asserted in his book Stocks for the Long Run that equities were the best long-term investment and that buying and holding through volatility is the best approach for investors. This according to an article in last week’s Wall Street Journal. Siegel’s research, which covered more than two centuries, showed that stocks generated 6.7% in annual returns (inflation-adjusted) compared to 3.6% for U.S. government bonds. He expects the post-election rally to continue and, the article says, believes “stocks will respond well to the prospect of more-favorable corporate taxes and less regulation.” That’s not to […]
The stock market boost fueled by the Trump victory will probably continue through December, says Wharton professor Jeremy Siegel in a recent interview with CNBC. “When you have all the small stocks, large stocks, even tech stocks—which we know have some challenges—joining with it, I don’t think this is something that ends tomorrow.” At the time of the interview, Siegel predicted that the Dow could reach 20,000 (it now stands at 19,300). Siegel says that Trump’s plan to reduce the corporate tax rate from 35 percent would bolster S&P company earnings significantly. “Even a reduction to 25 percent,” he says, […]
In the 1990’s, economists Robert Shiller and John Campbell created a valuation metric called the “cyclically adjusted price-earnings” ratio, or CAPE. A Wall Street Journal article from earlier this month examines whether this metric might be sending a false signal that the market is overheated. The CAPE ratio values shares based on 10 years rather than one year of earnings which, the article explains, “smooths out periods like just prior to the housing bust, when unusually strong earnings made stocks look reasonably priced, and post-recession recoveries, when weak earnings make stocks look expensive.” The CAPE is now at 27, about […]
In a recent interview with ThinkAdvisor, finance professor (and senior investment strategy advisor to Wisdom Tree Investments) Jeremy Siegel shares his view on a host of issues affecting current market conditions: Presidential election: The stock market would be “a little more comfortable with a Clinton victory, but they don’t love her at all.” With regard to a Trump win, “In the short run, there would be some negatives. But in the long run, I don’t think so.” Biggest threat to the markets now and in 2017: The threat of terrorism and/or a potential foreign policy crisis if Trump gets elected. […]
“If we get a good second half of the year earnings-wise, then I think the market could be up 10 to 15 percent” predicts well-known Wharton finance professor Jeremy Siegel in a recent interview on CNBC’s “Trading Nation.” According to CNBC’s account of the interview, Siegel says investor perceptions that the market is over-valued is based on weak earnings due in part to lower oil prices. However, he contends that earnings may be primed to rise by 10 to 12 percent as the global economic environment continues to stabilize, and this could lead to a sizeable rally. In that case, […]
Yale’s Robert Shiller and Penn finance professor Jeremy Siegel have long dueled over whether stocks are cheap or expensive, and Daniel Fisher, of Forbes, reviews the arguments in his recent post. Shiller devised CAPE by measuring the inflation-adjusted earnings per share for the S&P over the trailing 10 years, instead of just the most recent quarter or year, and compared that number to long-run averages since 1871. The results showed a strong tendency for CAPE to revert to the mean — meaning when it was high, stocks tended to underperform going forward, and when it was below the long-term mean, […]
As interest rates stay low, the appeal of high-dividend stocks has been on the rise and will probably only increase (as investors anticipate a dip in what is now an overvalued market). In a recent interview on CNBC’s “Trading Nation”, Jeremy Siegel (finance professor at the University of Pennsylvania’s Wharton School) asserted that low rates have shown investors that they can’t rely on CD’s, bank accounts or bonds as reliable sources of income. Dividend paying stocks, on the other hand, are yielding up to 4 percent (while 10-year Treasuries are yielding less than 2 percent). If rates should rise due […]
Financial Advisor reports on Wharton School of Finance Professor Jeremey Siegel’s comments at the annual Inside ETFs conference, where he critiqued the widely used Shiller P/E Ratio. Siegel did not necessarily attack the original logic of the Shiller P/E (which won its creator, Robert Shiller, a Nobel Prize). Instead, he noted that changes to the definition of generally accepted accounting principles (GAAP) earnings by Standard & Poor’s in 1990 have had an effect. Following the Financial Accounting Standards Board requirements, the GAAP change required mark-to-market accounting, which means companies mark down their assets when they have a loss but can only […]
Jeremy Siegel, a finance professor at the Wharton School of the University of Pennsylvania and senior investment advisor with Wisdom Tree Funds, offers his 2016 forecast in an interview appearing in Advisor Perspectives. Commenting on the current situation, he noted: “I have never seen a shortfall of earnings relative to estimates as sharp as we had this year. We had a total collapse in earnings.” Pointing to the energy sector he said: “no one thought oil would go down so far,” observing that “the S&P is not just a U.S. Index” because of “40% to 45% of its profits earned […]
Stock market talk has been filled with references to “bubbles” over the past couple years. But Wharton Professor and author Jeremy Siegel says those seeing a bubble in the current market need to get their eyes checked.
Author and Wharton Professor Jeremy Siegel says that, if the Federal Reserve does start increasing interest rates in September, it could be a blessing for the stock market.
Growth in US productivity has slowed considerably over the past decade, and explanations abound as to why. But Wharton professor and author Jeremy Siegel says the reality may be that new innovations have led to flawed data that underestimates just how productive the US has been.
Wharton Professor Jeremy Siegel, who had grown cautious on stocks recently, says the Federal Reserve’s lowering of interest rate projections has him feeling better.