The “Wizard of Wharton” Looks Ahead

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. […]

Siegel Says Stocks Will Higher

“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, […]

Are Stocks Cheap or Expensive?

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, […]

High Dividend Stocks Are Looking Good says Siegel

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 […]

Jeremy Siegel’s Critique of the Shiller P/E Ratio and His Market Outlook

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 […]