Jeremy Siegel: The Excessive Bearishness is Great for Equity Investors

Jeremy Siegel is the Russell E. Palmer Emeritus Professor of Finance at the Wharton School of the University of Pennsylvania and a senior investment strategy advisor to Wisdom Tree Funds. His book, Stocks for the Long Run, just published its sixth edition, is widely recognized as one of the best books on investing. It is available via the link on this page. He is a “Market Master” on CNBC and regularly appears on Bloomberg, NPR, CNN and other national and international networks

This is my 15th annual interview with Jeremy, which in the past we have done just before Thanksgiving. He has been one of the most prescient forecasters among those featured in Advisor Perspectives. You can access our prior interviews here: 2021, 2020, 2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, and 2008.

This interview is an abridged transcription of the opening keynote session of the Investment Insights Summit on December 13. You can watch that session here.

We spoke on November 24 last year, so this is a little bit more than a year since our last interview. The S&P 500 closed at 4,689 then, and yesterday it closed at 3,991. That is a decline of 14.9%. In our interview last year, you correctly predicted that the market would react badly to inflation and unexpectedly high CPI reports. You correctly said that you would not be surprised to see a correction of the magnitude that we have seen. But you also gave a target of 5,000 for the S&P 500, which would have been a gain of 6.7%. What is the fair value of the S&P 500 now, and what returns do you expect for the next year?

I was a little too optimistic. We got within 4% of my target on January 1, and I thought that maybe I was too low! But the Fed got very aggressive. We did enter bear market territory. I was sure about NASDAQ would be in a bear market. I didn't know that S&P would, but it did.