Jeremy Siegel

Jeremy Siegel

Postby winston » Tue Jul 28, 2009 8:17 pm

Is Jeremy Siegel Just Plain Wrong? by Alexander Green

Highlights in this issue:
Has Jeremy Siegel used bad data to reach his conclusions?
The real reason to invest in stocks.
Why past stock performance means nothing to the future.


For more than a decade, author and academic Dr. Jeremy Siegel had the Midas touch.

His book "Stocks For the Long Run," first published in October 1996, surveyed more than 200 years of stock market history both in the United States and abroad and made a compelling case that common stocks are the very best long-term investment vehicle. Better than cash. Better than bonds. Better than real estate. Better than gold.

In the roaring bull market of the 90s - and since - his book was required reading. Millions of investors were strongly influenced by his research.

In the process, Siegel became a celebrity, appearing regularly on network and cable investment shows. He is also now an advisor to WisdomTree Investments, a sponsor of exchange-traded funds.

But while history once buttressed Siegel's grand conclusions, current events haven't been so kind.

More specifically, as of June 30, U.S. stocks have underperformed long-term Treasury bonds over the past five, 10, 15, 20 and 25 years.

To add insult to injury, Jason Zweig recently argued in The Wall Street Journal that Siegel's methodology was flawed from the beginning. It turns out that Siegel's chosen stock market indexes and dividend calculations from the 1800s were not representative of the period, skewing returns upward.

"Another emperor of the late bull market," Zweig concludes, "has turned out to have no clothes."

But what's the real story here: Are stocks not the best long-term vehicle? Are bonds - or something else - better? Is Siegel just plain wrong?

The answer to each of these questions, it seems, is yes and no.

Bonds have outperformed stocks over the last 25 years in part because yields at the starting point - during the hyper-inflationary early 80s - were sky high. From current low levels, outsized returns like these are impossible.

(That doesn't mean, of course, that equity returns couldn't still lag them.)

And we can quibble about how equity returns were calculated in the 1800s, but let's be serious. What difference does it make exactly what "stocks" returned when investors were swapping certificates - along with fox and beaver pelts - under a shade tree beside a dirt road.

That scenario bears little resemblance to modern financial markets.

No, the real reason to invest in stocks is because it allows the average investor to hold a liquid, diversified portfolio of profitable businesses, something that would otherwise be cost prohibitive for most.

Granted, the economy is tough right now. But businesses can always respond to adverse circumstances.

During recessions, a business can cut costs, lay off unnecessary personnel and refinance debt at lower levels. During inflationary times, businesses can pass on higher costs to customers. Even the burden of higher taxes and greater regulation - both underway - are ultimately passed along to consumers.

In short, we will always have economic needs. Yet it is not government that provides us with food, clothing, shelter, health care and other essential goods and services. It is business.

Businesses exist to meet our needs and, in the process, maximize profits for shareholders.

Business ownership has always been the most reliable route to financial independence. And owning a diversified portfolio of fine companies should continue build and safeguard capital.

Just don't make the mistake of believing that anything is guaranteed or that the future will look just like the past.

As the late, great Peter Bernstein said in the Preface to the first edition of "Stock for the Long Run":

"When all is said and done, the future will always remain hidden from us. The past, no matter how instructive, is always the past... Professor Siegel so rightly warns readers of this when he writes that 'the returns derived from the past are not hard constants, like the speed of light or gravitation force, waiting to be discovered in the natural world.

Historical values must be tempered with an appreciation of how investors, attempting to take advantage of the returns from the past, may alter those very returns in the future.' Although the advice set forth in this book very likely will yield positive results for investors, the odds are higher that uncertainty will forever be your inseparable companion."

Source: Oxford Club
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Siegel Indicator

Postby winston » Sun Jan 09, 2011 8:45 pm

The Siegel Indicator Points to a Bullish 2011

In January 2008, stock prices were weak and the market crashed that year.

But in January 2009, although stocks were weak again, the market recovered sharply from March onward. In January 2010, we saw a decent rally and the market went on to do well for the rest of the year.

So what indicator does work?

My favorite is what I call the Siegel Indicator. In his book, Stocks for the Long Run, Jeremy Siegel states that any time the U.S. stock market collapses by 50% or more, it rallies and then averages 20% a year over the next five years.

Siegel has been right for the past two years and he's bullish for 2011.


Source: Investment U
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Re: Jeremy Siegel

Postby winston » Sat Jan 22, 2011 8:29 am

Siegel: Stocks Poised For More Gains By Steve Dew and Olivier Ludwig


Jeremy Siegel, the Wharton finance professor and senior advisor to ETF sponsor WisdomTree, took a bullish view on U.S. equities and economic growth yesterday, saying that even though problems remain in the real economy, retail investors are looking for better returns.

Siegel noted at the outset of his remarks that, despite the large federal budget deficit, high unemployment and the dire financial straits of states like California, Illinois and Michigan, most investors don’t realize how much the U.S. equity market and corporate earnings have bounced back since the recession began in 2008.

“It’s the biggest bounce back from a recession ever, but the public isn’t in it,” Siegel said yesterday during his quarterly economic-outlook conference call. “The public is sitting with literally trillions of dollars on the sidelines earning zero percent interest in money market funds wondering where they can do a little bit better.”

Siegel said the combination of money on the sidelines and the below-average price-to-earnings ratio for the companies that comprise the S&P 500, currently at 13.5, are strong indicators that stocks will continue to rally in 2011. “I am bullish on this year,” he said.

Despite his optimistic take on U.S. equities, Siegel acknowledged that problems in the 17-nation eurozone, and a potential crisis in the U.S. municipal bond market, represent threats to his outlook.

“My feeling is that the dollar will be strong against the euro, and my sense is that they will ease [interest rates] in Europe, so you’ve got euro risk,” said Siegel.

While prominent analysts such as Meredith Whitney have predicted a rash of municipal bond defaults in the coming year, Siegel is more sanguine.

“There are structural problems at the state level, but they will be improved by the stronger economy,” he said. Siegel also believes that the federal government will extend some guarantees to distressed municipalities, but will likely demand concessions from public employee unions in the form of reduced pension payments.

http://www.indexuniverse.com/hot-topics ... gains.html
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Re: Jeremy Siegel

Postby winston » Tue Aug 11, 2015 9:03 pm

Jeremy Siegel says stock-market correction may be on way

Longtime stock-market bull Jeremy Siegel on Monday warned that equities could be in for a correction amid a possible rate hike by the Federal Reserve next month.

"The next six or seven weeks are going to be very rough," the well-known Wharton School finance professor told CNBC Monday afternoon.

Jitters over a likely September rate hike combined with weaker corporate earnings due to falling oil prices, a strong dollar and seasonal weakness in late August and September will make it difficult for stocks to work "much higher" over the next six or seven weeks, he said.

Once a rate hike is out of the way "and world doesn't end," a "nice rally" could follow in the fourth quarter, he said.

Siegel said he's sticking with his call for the Dow Jones Industrial Average DJIA, +1.39% to hit 20,000, but said that target would be difficult, though not impossible, to hit by the end of the year.

Source: MARKETWATCH
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Re: Jeremy Siegel

Postby iam802 » Thu Jan 07, 2016 7:43 am

Jeremy Siegel: Stocks Could Rise 10% in 2016

Wharton finance professor Jeremy Siegel thinks the odds are good that major U.S. stock market indexes will rise 10% in 2016, following last year’s flat performance.

The recent plummet in China’s stock market will not hold the U.S. back longer term, Siegel notes.

He expects GDP growth of 2%-2.5% in the U.S., and believes the Fed will increase interest rates only about twice in 2016, versus the three or four times projected by many analysts.

Thus, modest interest rates, along with rebounding corporate earnings, should underpin U.S. equities.

In this Knowledge@Wharton interview, Siegel also discusses U.S. labor markets, productivity and absent wage increases, problems in the junk bond market, and the risks of worldwide deflation and recession.

...



Source: Knowledge@Wharton

http://knowledge.wharton.upenn.edu/arti ... ok-stocks/
1. Always wait for the setup. NO SETUP; NO TRADE

2. The trend will END but I don't know WHEN.

TA and Options stuffs on InvestIdeas:
The Ichimoku Thread | Option Strategies Thread | Japanese Candlesticks Thread
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Re: Jeremy Siegel

Postby winston » Wed Jul 06, 2016 1:51 pm

Siegel: Stocks may jump 15% in the 2nd half of 2016 — here’s why

by Alex Rosenberg

With energy earnings set to rise nicely and the global macroeconomic environment stabilizing, he says earnings may be ready to rise by 10 to 12 percent.

If that materializes, then "given the low interest rates, the market does not look expensive" — particularly with "all the central banks acting very, very dovish."


Source: CNBC.com

http://www.cnbc.com/2016/07/05/siegel-s ... yptr=yahoo
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Re: Jeremy Siegel

Postby behappyalways » Fri Dec 22, 2017 10:37 pm

Still Bullish After All These Years
https://www.bloomberg.com/gadfly/articl ... hese-years
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Re: Jeremy Siegel

Postby behappyalways » Mon Oct 04, 2021 9:27 pm

Market is unprepared for the inflation fallout, Wharton’s Jeremy Siegel warns
https://www.cnbc.com/2021/10/03/market- ... iegel.html
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Re: Jeremy Siegel

Postby behappyalways » Sat Nov 20, 2021 8:41 am

Markets Not Prepared for Fed Hikes: Wharton's Siegel
https://m.youtube.com/watch?v=gSePvdc-x9M
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Re: Jeremy Siegel

Postby winston » Tue Jun 14, 2022 7:54 am

Wharton's Siegel: Now's a Good Time to Buy Stocks

by DAN WEIL

“Hold in there,” he told CNBC. “If you got cash, begin to employ it. You won’t be sorry a year from now.”

The market has recovered from bigger drops than what we’re experiencing now, Siegel noted

“We’ve had bigger shocks in the past,” he said.

“There may be another 5%, who knows, there may be another 10%, but that ... just raises the return on the market looking forward.”

The forward 12-month price-earnings ratio for the S&P 500 stood at 16.8 as of June 10, according to FactSet.


Source: The Street

https://www.thestreet.com/investing/sie ... y%2BStocks
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