Wharton Professor Jeremy Siegel on "Stocks for the Long Run" Book, Plus Current Market Conditions
- Feb 16, 2023
- 30:14
- Full Episode
Wharton Professor Jeremy Siegel presents his thoughts on financial market returns and long-term investments from the sixth edition of his well-known book, "Stocks for the Long Run." This conversation with Jeremy Schwartz of WisdomTree Asset Management took place at the Jacobs Levy Center's Frontiers in Quantitative Finance Conference in September 2022.
The definitive guide to stock trading, "Stocks for the Long Run" has been providing the knowledge, insights, and tools that traders need to understand the market for nearly 30 years. It’s been updated with new chapters and content on:
- The role of value investing - The impact of ESG―Environmental/Social/Governance―issues on the future of investing - The current interest rate environment - Future returns investors should expect in the bond and stock markets - The role of international investing - The long-run risks on equity markets - The importance of black swan events, such as a pandemic and the financial crisis
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Brief Summary
Professor Siegel discusses stock returns, bond yields, and critiques the Fed's monetary policy amid current economic challenges.
Key points
- Durability of Real Returns. Despite crises, the real return has remained steady at 6.7% for 30 years.
- Inflation Predictions. The professor warns that rapid money supply increases will lead to inflation.
- Valuation vs. Growth. Valuation is more important than growth for long-term returns, as shown by historical data.
- The VIX Misunderstanding. People misunderstood the VIX as a hedge, but it deteriorated over time.
- Recession Questions. Is the U.S. in a recession despite adding millions of workers?
Episode highlights
- Durability of Real ReturnsDespite crises, the real return has remained steady at 6.7% for 30 years.“The real return is remarkably durable.”1:00Feb 16, 2023
- Inflation PredictionsThe professor warns that rapid money supply increases will lead to inflation.“This is just going to produce a tremendous amount of inflation.”10:47Feb 16, 2023
- Valuation vs. GrowthValuation is more important than growth for long-term returns, as shown by historical data.“Valuation trumps growth in the long run.”21:01Feb 16, 2023
- The VIX MisunderstandingPeople misunderstood the VIX as a hedge, but it deteriorated over time.“They thought it was stable... but it kept on deteriorating.”23:46Feb 16, 2023
- Recession QuestionsIs the U.S. in a recession despite adding millions of workers?“Are we in a recession or not?”26:07Feb 16, 2023
