What Would Jeremy Siegel Buy?

Tyler Durden's picture

Answer: Everything. Just as he did January 2008...


Today, the "renowned" Wharton School of Finance professor Jeremy Siegel opined that the Dow could top 18,000 by year-end or 19,000, or 20,000...

"I think we're going to get to 18 and above. Could it go to 19, 20? It could."


"We could be overvalued at 21,000 - at least in the short-term."

So strap in!! Or perhaps one should consider the "renowned" money-manager academic professor's perspective in 2008... (emphasis added)

2008 Economic and Market Forecast


by Jeremy J. Siegel


The economic forecasts for 2008 are now split down the middle. Almost all prognosticators see a marked slowdown in economic activity in the first half of this year. But about one half (and that includes me) believe that the U.S. economy will skirt a recession and that growth will pick up in the second half of the year; the other half see falling home prices and a credit squeeze that finally will pound consumers, precipitating a short but mild recession. (There are always a few who think this is the “beginning of the end,” but I’ll ignore them.)


As I see it, the U.S. economy has more to fear from rising oil, food, and gasoline prices than it does from the credit crunch. As far as the housing crisis goes, I believe the actual number of foreclosures this year will be below what the market predicts; I believe investors have overreacted to the mortgage crisis. Yes, far too much money was lent on far too easy terms, which caused the housing market to experience a boom/bust cycle. But a lot of those foreclosures were for second and investment properties that many speculators were hoping to flip in a hot market. The vast majority of the homeowners who received subprime mortgages are current with the payments, and lenders are willing to work out terms with those who run into difficulties.


The Economy and Stocks


That said, the impact of the subprime crisis on the psychology of consumers and businesses will leave its mark. I predict that GDP growth will slow in the first half of this year to about 1% and rise in the second half, as conditions in the credit market ease. Overall, I expect 1.5% to 2.5% GDP growth in 2008.


I believe the stock market will do better in 2008 than it did in 2007, when it chalked up a 5.5% return, the fifth year in a row that the market went up. Year-ahead forecasts for the stock market are notoriously difficult, but I believe that a 10% to 12% gain is possible, on the heels of a recovering financial sector. Financial stocks plummeted almost 20% last year, and this was the reason why the market had a mediocre year. Outside of financials, the S&P 500 Index had double-digit returns. A revival of financial stocks would spur good market gains this year.


Interest Rates


What does all this mean for interest rates? The Federal Reserve cut the Fed funds rate to 4.25% on December 11, but it will have to do more this year. I believe that the Fed will get rates down to 3.5% before ratcheting them upward in the second half of next year as the economy improves.


U.S. government bonds did very well in 2007, as interest rates on top-rated securities plunged in response to the credit crisis. But as the risk premiums recede, money will flow away from government bonds and their interest rates will rise. I recommend investors cash in governments and top-rated corporate bonds now - you got a nice ride in 2007 that you won’t get this year.




In the meantime, have a healthy and prosperous new year!

*  *  *

Why are the 'smartest' people always introduced as "renowned"?

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quintago's picture

It's not renowned. It's re-owned. They do it over and over again

theXman's picture

A brainless bot stuck in the BUY mode.

NOTaREALmerican's picture

Perhaps it's not what HE buys, it's what he gets others to buy and the fee he charges.     He seems to have survived the last collaspe pretty well (as judging by his suit, anyway).  

Escrava Isaura's picture


"Professor Jeremy Siegel's book "Stocks for the Long Run" has been one of the most respected sources of delusion”— Sanjib Das, at Amazon.com

Escrava Isaura's picture

More Dangerous Advice from Jeremy Siegel.....


Short and sweet... Most of you will enjoy

DirkDiggler11's picture

Siegel must have been Dennis Fartman's Finance 101 professor. They both have the same makket timing abilities ...

TheReplacement's picture

Nah.  We just don't get to use the real dictionary.  In that book "renowned" really means retarded. 

Also, Nobel Peace Prize really means Ignoble Piece of Poop

Good is bad.

War is peace.

It's easy.  Everyone should try a few.  You might like it.

It's hard.  Nobody shouldn't try many.  It can't hate you.

stinkhammer's picture

seaguls fly in and shit all over the place

dwayne elizando's picture

If your going to "buy everything" then why not just short the dollar. It'd be alot easier.

TheReplacement's picture

Whoa.  Whooa.  Slow down there big fella.  Whoa.

LawsofPhysics's picture

"Smart and Savy"...



(will someone tell that guy to STFU or we revoke his club status)

NOTaREALmerican's picture

That smart-n-savvy guy's got a nice suit.   Ever notice how the smart-n-savvy people seem to have nice suits.   I bet he's got lots of nice suits.   Nice suits are pretty expensive, but he's a smart-n-savvy guy, I'm sure he can afford it.

TheReplacement's picture

Very smart and savvy.  He's sold his soul for an uncomfortable style of clothing and he works with stiffs.  But wait, that's not all.  In the end he will be just as dead as the poorest person alive.  Way to go chief.  You just won NOTHING.

NOTaREALmerican's picture

Has anybody written a DOW 32k book, again?    Seems like there are some signs "forming".

MrSteve's picture

Anagram solver reveals deeper trooths to why "renown" is always used as a code word:

Enron  ownner      are two separate, independent but still highly correlated solutions



Hal n back's picture

the higher it goes, the deeper it drops. Does anyone remember 2000--thats when there was actual growth left in the economy--the growth was zapped and the 50% growth rate of companies like Cisco came to an end--there is only just so much of a market out there.


2nd qtr revenues GAAP should be interesting in a couple of weeks.



GooseShtepping Moron's picture

Unfortunately he might be right, just not for the reasons he thinks he is. That would not be my bet, however. The bull market looks like it's running out of steam with the 1YR chart flattening rather dramatically. 30 day volatility is nonexistent so you can probably expect a pretty boring July. In fact, barring any geopolitically induced market moves, it could be that stocks stay absolutely flat for the rest of the summer. As overvalued as the market is, I still think you won't see any decisive "rotation" out of stocks without a pretty dramatic selling catalyst and I am unable at this point to say what that will be, or when.

Its All Good's picture

Poor 2nd quarter earnings results could potentially be said selling catalyst, but I believe companies still have more room (and willingness) to manage/massage their numbers so probably won't materialize just yet.

Oldwood's picture

I didn't know anyone actually cared about earnings anymore. This is a fucking casino, nobody cares what the paper your cards are made of is worth. Just place the fucking bet. Fundamentals are for fools and idiots.

If this was about rationality, why would poker players come back for another game if they lost so badly last time? Everyone knows as long as you stay in the game, there is only one winner. But then again, people buy lotto tickets don't they. What are the odds again?

TheReplacement's picture

Start printing again but just mail it directly to the pleebs so they can go shopping to stimulate the ecomony so more people will have job so they can contribute to SS and 401Ks which will essentially become the same thing with MyRAs and what all.  Elect the next thief in chief and borrow those funds to "balance the budget" and start the cycle all over again.

Ed:  Only next time there won't be so many eager overseas suckers to pick up the debt just when we need it most.

Brutlstrudl's picture

yeah, and as the Dow continues to climb, the dollars that are used to buy it will continue to lose purchasing power. DOW 21000 will get you a cuppa Joe. Gold and silver, Bitchez.

pragmatic hobo's picture

what a fuck-turd ...

ebworthen's picture

Buy, buy, buy!!!

(I need to sell.)

Da Yooper's picture

Buy, buy, buy!!!

(I need to sell.



is more than likely very close to the real truth


They pimp & bail while GDP get  hosed

fzrkid's picture

how do i short the market when this does start colllapsing?

NOTaREALmerican's picture

You can't.

The market is like Schrodinger's Cat.  If you short "the market" it's alive.   But if you don't short it, it's dead.   So,  just by thinking about shorting it, it lives forever.

TheReplacement's picture

Easy.  Stay out of it.  Invest in real things with tangible value and yourself.


Suppose the dollar collapses and the market follows.  Just what would you buy with your worthless dollar profits?

Just stay out.

Atomizer's picture

Go buy and speculate Dow 21k. I can buy your broken Jew ass house/assets for pennies on the dollar. 

/ sarc 

orangegeek's picture

yet another good sign - euphoria at tops


keep pumping the bagholders Jeremy

Dublinmick's picture

No he would buy gold or silver just like his brother in law, herr Goldstein and Silverman did.

Hongcha's picture

Yes he was wrong in 2008 but his calls lately more than made it all back.

Anyone who just held on through got their money back and then some.

All the wise bears got nothing.

TheReplacement's picture

Using your logic,

Perhaps the wise bears are still holding on to their investments but the market just hasn't turned in their favor, yet.  If the market turns hard for them they will be sitting, not pretty, but perhaps survivable.  Nobody holding paper promises for a company won't even exist at that point will be able to say that.

Bet on the market in this environment and you are basically all in.  Best against it and you will still have assets no matter what the market does.  Pick your poison.

SheepDog-One's picture

I feel like buyin everything too, but only if I can buy it all on full margin! Yay!

Thirtyseven's picture

I wonder if Chaim "Jim" Cramer still advocates doubling down on Bear Stearns.

esum's picture

Theories and crystal balls are great when they are correct.

When they are wrong......... ITS YOUR MONEY

what if we are entering the biggest depression in history........

What if the petro dollar fails.......

What if Vlad sends ground troops and seizes the oil.......

What if the H1N1 on steroids is released........

What if negrodomus stops fundraising and golf and uses his pen ± phone.......

My PEN IS bigger  ........ SCOTUS


esum's picture

How much money

Do I have to borrow and then margin

and contribute



esum's picture

How much money

Do I have to borrow and then margin

and contribute



d edwards's picture

"Renowned" sounds better than "infamous" to answer the question.

yogibear's picture

It's amazing this guy is a professor. He couldn't figure out if the market was overpriced if it was hitting him in the face. Just another Wall Street chearleader.


Remington IV's picture

we are doomed ... again

Squid Viscous's picture

he looks like the offspring of an insect and a nice jewish girl from crown heights... hope it was fun for her

luna_man's picture



Even if the "DOW" gets to 21,000, how many 99%'s will cash in for million or more of gains?


by the way, did you purchase your lottery ticket's today like i did

damicol's picture

"Renowned" fuckwit.

Paid by other "renowned" fuckwits

 to pass "renowned" advice to the rest of the fuckwits.

See if this crony corrupt clown doesn't do his "renowned" bit of crony bullshitting, how the fuck are all the fucking sheeple going o get fed their daily diet of "renowned" shit