# Jeremy Siegel

Jeremy James Siegel (born November 14, 1945) is an American economist who is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania. He appears regularly on networks including CNN, CNBC and NPR, and writes regular columns for Kiplinger's Personal Finance and Yahoo! Finance. Siegel's paradox is named after him.

## Early life and education

Siegel was born into a Jewish family in Chicago, Illinois, and graduated from Highland Park High School. He majored in mathematics and economics as an undergraduate at Columbia University, graduating in 1967 with a Bachelor of Arts (B.A.), summa cum laude, with membership in Phi Beta Kappa. He obtained a Ph.D. in economics from the Massachusetts Institute of Technology (MIT) in 1971. As a graduate student he studied under Nobel Prize winners Paul Samuelson and Robert Solow.

## Career
### Academics

He taught at the University of Chicago for four years before moving to the Wharton School of the University of Pennsylvania.

### Investing advice

In his books Stocks for the Long Run (1998) and The Future for Investors (2005), Siegel outlines his investing theories and advice.
He recommends against holding bonds, arguing their long-term performance tends to be negative after inflation. Siegel's position on bonds has been disputed, with critics proposing his data is flawed due to use of unreliable information from earlier sources.
For stocks, Siegel recommends relying primarily or exclusively on index funds when possible, as active management tends to underperform market averages over long periods. (When he wrote in the late 1990s and early 2000's, index funds were not necessarily available in 401k plans but have become more popular since then.) He is not opposed to holding a small portion of the portfolio in single stocks, provided their selection is prudent.
For all stocks or investment options, Siegel advise following a "D-I-V" mnemonic as a guideline: prioritizing dividends, international, and valuation. His research found dividend-paying stocks tend to offer superior long-term performance, as they are associated with profitable mature companies that hold up well during bear markets and recessions, and are also more likely to be reasonably valued. He has endorsed the Dogs of the Dow method, of holding the highest-dividend stocks in the Dow Jones Industrial Average. Siegel recommends substantial international stock holdings, up to 40-50%, to avoid home country bias and obtain a broader variety of options. For valuation, Siegel recommends stocks or indexes that are fairly valued or undervalued while avoiding sectors that are overvalued or trendy, as they tend to offer poor long-term results. He calls this phenomenon the "growth trap" and notes that fast-growing companies, industries or economies are not necessarily good investments.
Siegel's academic research showing dividend-paying companies tend to offer superior long-term performance with lower risk has influenced the construction of indexes used for WisdomTree Investments, a provider of exchange traded funds. After the dot com bubble of the late 1990s and early 2000's Siegel became somewhat skeptical of the prevailing use of market capitalization for constructing index funds, and thus helped develop fundamental indexing.

## TV programs

He has been a frequent guest on the business TV program Kudlow & Company on CNBC, hosted by Lawrence Kudlow. Siegel, like Kudlow, tends to favor supply-side economics. 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 Initial Public Offerings, stock sold by new companies, 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 IPOs consistently underperformed a small-cap index in nearly four out of five cases.

### 2000 bullishness

Siegel has been criticized for bullishness on the stock market 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."
That being said, Professor Siegel was correct when he also stated 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."
On March 14, 2000, The Wall Street Journal published an opinion piece by Siegel titled: "Big-Cap Tech Stocks Are a Sucker Bet". The piece issued warnings against investing in some of the hottest technology stocks during the dot com bubble.

## Wealth and shareholding

As of 2007, Siegel was advisor to WisdomTree Investments, a sponsor of exchange-traded funds. He also owned about 2% of the company, which was then worth an estimated $700 million. This would mean that Siegel's stake equates to about $14 million.