Jeremy Siegel
Jeremy James Siegel (born November 14, 1945) is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania in Philadelphia, Pennsylvania. Siegel comments extensively on the economy and financial markets: he appears regularly on networks such CNN, CNBC and NPR, and writes regular columns for Kiplinger's Personal Finance and Yahoo! Finance. Siegel's paradox is named after him.
Biography
Siegel was born in Chicago, Illinois, and graduated from Highland Park High School. He majored in mathematics and economics as an undergraduate at Columbia University and obtained a Ph.D. from MIT in 1971. He is currently an advisor to WisdomTree Investments, a sponsor of exchange-traded funds, and as of early 2007 owns a 2% share of the $700 million market capitalization company.[1]
TV programs
He has been a frequent guest on the business TV program Kudlow & Company on CNBC, where supply-side economics fan Lawrence Kudlow hosts. He is a supply-sider like Kudlow. Siegel is also a lifelong friend of Robert Shiller, an economist at the Yale School of Management, whom Siegel has known since their MIT graduate school days. Siegel and Shiller have frequently debated each other on TV about the stock market and its future returns, and have become financial media celebrities, regularly appearing on CNBC.
Criticisms
IPO debate
Siegel has said that IPOs typically disappoint. In his The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New (Crown Business, 2005), Siegel analyzed 9,000 IPOs between 1968 and 2003 and concluded that they consistently underperformed a small-cap index in nearly four out five cases. Others disagree.
2000 bullishness
Some have criticized Professor Siegel for being bullish on the stock market back in 2000. In a BusinessWeek interview in May 2000 when asked about the stock market, he replied:
"Seven percent per year [average] real returns on stocks is what I find over nearly two centuries. I don't see persuasive reasons why it should be any different from that over the intermediate run. In the short run, it could be almost anything."[2]
That being said, Professor Siegel was spot on when he also said in the same interview:
"I have voiced my concern about the technology sector, and I sometimes advise people to shade down from that sector relative to its percentage in the [Standard & Poor's 500-stock index.] I really am concerned with these companies that have p-e ratios of 90, 100, and above. I still think stocks, as a diversified portfolio, are the best long-run investment. I will say that indexed bonds at 4% are an attractive hedge at the present time. To get a 4% real rate of return, although it's not as high as 6.5% to 7% that we talked about in stocks, as a guaranteed rate of return is certainly comforting against any inflation."
Bibliography
Authored or co-authored
- The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New (2005).
- Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies, McGraw-Hill (1994), ISBN 0-07-149470-7.
- Revolution on Wall Street: The Rise and Decline of the New York Stock Exchange (1993).
- David R. Henderson (ed.), ed. (2008). "Stock Market". Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.
Notes
- ↑ "WisdomTree ETFs Target Earnings, But Can Start-up Turn A Profit?". 2007. Retrieved 2007-03-03.
- ↑ http://www.businessweek.com/2000/00_22/b3683156.htm
External links
- JeremySiegel.com where the "Wizard of Wharton" weighs in on the markets, the economy and investment strategies.
- Bloomberg Article: "The Shiller & Siegel Show"
- EricTyson.com Summary of global investing perspectives in "Stocks for the Long Run"