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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Wed, 07/02/2014 - 17:35 | 4919289 quintago
quintago's picture

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

Wed, 07/02/2014 - 17:54 | 4919349 theXman
theXman's picture

A brainless bot stuck in the BUY mode.

Wed, 07/02/2014 - 18:00 | 4919365 NOTaREALmerican
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).  

Wed, 07/02/2014 - 18:12 | 4919390 Escrava Isaura
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

Wed, 07/02/2014 - 18:47 | 4919486 Escrava Isaura
Escrava Isaura's picture

More Dangerous Advice from Jeremy Siegel.....

http://illusionofprosperity.blogspot.com/2011/02/more-dangerous-advice-f...

Short and sweet... Most of you will enjoy

Wed, 07/02/2014 - 18:35 | 4919456 DirkDiggler11
DirkDiggler11's picture

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

Wed, 07/02/2014 - 23:32 | 4920267 TheReplacement
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.

Wed, 07/02/2014 - 17:37 | 4919295 WageSlave
WageSlave's picture

To da moon!

Wed, 07/02/2014 - 17:37 | 4919296 WageSlave
WageSlave's picture

To da moon!

Wed, 07/02/2014 - 17:38 | 4919297 stinkhammer
stinkhammer's picture

seaguls fly in and shit all over the place

Wed, 07/02/2014 - 17:39 | 4919300 dwayne elizando
dwayne elizando's picture

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

Wed, 07/02/2014 - 23:33 | 4920269 TheReplacement
TheReplacement's picture

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

Wed, 07/02/2014 - 17:43 | 4919311 LawsofPhysics
LawsofPhysics's picture

"Smart and Savy"...

 

/s

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

Wed, 07/02/2014 - 17:56 | 4919359 NOTaREALmerican
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.

Wed, 07/02/2014 - 23:35 | 4920277 TheReplacement
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.

Wed, 07/02/2014 - 22:22 | 4920085 WillyGroper
WillyGroper's picture

.


Wed, 07/02/2014 - 17:42 | 4919313 Seasmoke
Seasmoke's picture

Oy vey.

Wed, 07/02/2014 - 17:53 | 4919344 1stepcloser
Wed, 07/02/2014 - 18:13 | 4919399 Da Yooper
Da Yooper's picture

mehhhhh

Wed, 07/02/2014 - 17:46 | 4919327 NOTaREALmerican
NOTaREALmerican's picture

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

Wed, 07/02/2014 - 18:16 | 4919412 MrSteve
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

 

 

Wed, 07/02/2014 - 17:46 | 4919328 Hal n back
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.

 

 

Wed, 07/02/2014 - 17:47 | 4919332 GooseShtepping Moron
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.

Wed, 07/02/2014 - 18:31 | 4919447 Its All Good
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.

Wed, 07/02/2014 - 18:44 | 4919475 Oldwood
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?

Wed, 07/02/2014 - 23:39 | 4920286 TheReplacement
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.

Wed, 07/02/2014 - 17:48 | 4919334 Brutlstrudl
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.

Wed, 07/02/2014 - 17:49 | 4919338 tradewithdave
tradewithdave's picture

Altucher 20,000!

Wed, 07/02/2014 - 17:54 | 4919347 pragmatic hobo
pragmatic hobo's picture

what a fuck-turd ...

Wed, 07/02/2014 - 17:59 | 4919369 ebworthen
ebworthen's picture

Buy, buy, buy!!!

(I need to sell.)

Wed, 07/02/2014 - 18:16 | 4919409 Da Yooper
Da Yooper's picture

Buy, buy, buy!!!

(I need to sell.

^^^^^^^^^^^^This

 

is more than likely very close to the real truth

 

They pimp & bail while GDP get  hosed

Wed, 07/02/2014 - 18:03 | 4919377 fzrkid
fzrkid's picture

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

Wed, 07/02/2014 - 18:14 | 4919406 NOTaREALmerican
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.

Wed, 07/02/2014 - 23:40 | 4920290 TheReplacement
TheReplacement's picture

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

Why?

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

Just stay out.

Wed, 07/02/2014 - 18:09 | 4919389 Atomizer
Atomizer's picture

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

/ sarc 

Wed, 07/02/2014 - 18:11 | 4919392 orangegeek
orangegeek's picture

yet another good sign - euphoria at tops

 

keep pumping the bagholders Jeremy

Wed, 07/02/2014 - 19:00 | 4919522 Dublinmick
Dublinmick's picture

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

Wed, 07/02/2014 - 19:19 | 4919585 Hongcha
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.

Wed, 07/02/2014 - 23:45 | 4920299 TheReplacement
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.

Wed, 07/02/2014 - 19:22 | 4919597 SheepDog-One
SheepDog-One's picture

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

Wed, 07/02/2014 - 19:26 | 4919604 Thirtyseven
Thirtyseven's picture

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

Wed, 07/02/2014 - 19:29 | 4919610 esum
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

 

Wed, 07/02/2014 - 19:34 | 4919617 esum
esum's picture

How much money

Do I have to borrow and then margin

and contribute

BEFORE I AM TOO BIG TO FAIL....?

 

Wed, 07/02/2014 - 19:33 | 4919618 esum
esum's picture

How much money

Do I have to borrow and then margin

and contribute

BEFORE I AM TOO BIG TO FAIL....?

 

Wed, 07/02/2014 - 20:07 | 4919708 d edwards
d edwards's picture

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

Wed, 07/02/2014 - 20:17 | 4919740 yogibear
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.

 

Wed, 07/02/2014 - 20:53 | 4919839 Remington IV
Remington IV's picture

we are doomed ... again

Wed, 07/02/2014 - 21:47 | 4919998 Squid Viscous
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

Wed, 07/02/2014 - 22:28 | 4920100 luna_man
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

Thu, 07/03/2014 - 02:56 | 4920569 damicol
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

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