The latest Jeremy Siegel column defends his earlier column “Why Stocks are Dirt Cheap” in which he argued that the S&P500 was “extraordinarily cheap.” Both columns are worth the read.
In the earlier column he stated:
No one can guarantee the future of the stock market. But I believe that stock prices are now so extraordinarily cheap that I would be very surprised that if an investor who bought a diversified portfolio today did not make at least 20% or more on his investment in the next twelve months.
It’s not exactly a prediction, but even so it belongs in the Prediction Tracker.
In the later column he responds to critics and concludes:
The low level of stocks today is not a result of investors expecting current depressed levels of earnings will persist, but rather a result of record risk premiums in the debt and equity markets. When these extraordinary risk levels return to normal, we can expect much higher stock prices.
My portfolio hopes he’s right.