Tag Archives: Jeremy Siegel

Rob Arnott’s Sobering World View

Rob Arnott is one of the few experts who predicted that the past decade was likely to be unpleasant for equity investors.  In early 2002, he wrote a paper with Peter Bernstein that concluded that stocks were quite likely to under-perform bonds over the next decade.  In mid-2009, having seen a long period in which bonds had, in fact, outperformed stocks, he wrote an article that was titled Bonds: Why Bother?

In this article, Mr. Arnott presents data to demonstrate that bonds have persistently out-performed stocks over a number of very long (multi-decade) historical periods.  He then shows that when you look at price appreciation of stocks, net of inflation, there were three 20-30 year periods in the 20th century in which the real prce appreciation of stocks was less than or equal to zero! Continue reading

Jeremy Siegel says we are in a ‘bond bubble’

Jeremy Siegel, Wharton professor and author of well-known Stocks For The Long Run, published an article this week in the Wall St. Journal saying that we are in a bond bubble.  Bubbles are periods of irrational price appreciation in an asset class, followed by a return to rationality when everyone heads for the door and sells.  With yields from government bonds at multi-decade lows, this is hardly a risky call. Continue reading