The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

The Wizard of Wharton

01/22/2020

One of my favorite analysts is the affable Dr. Jeremy Siegel of Wharton.  In his last commentary, he doesn’t foresee any recession but thinks the stock market has gotten ahead of itself.  It is just going up too fast, and “trees never reach the sky.”  He recalls January of 2018 when the same thing happened, only to experience a scary sell-off the next month.  This suggests next month might be the time to get any remaining cash into the market.  (I recall that February, as it was more scary than a normal pullback.  Instead of just falling sales and profits, the largest user of derivatives was also in trouble, which might have triggered a financial crisis.)

Sometimes called a “perma-bull”, Dr. Siegel nonetheless foresees a slowing growth rate in corporate profits.  This is often called a “profits recession” and is nothing to be concerned about.  It is a mere slowdown, maybe not even a pullback.

Interesting, he also sees foreign markets improving markedly, making international stocks more attractive again.  Hmmmm . . .

There are analysts, and there are analysts, but there is only one Wizard of Wharton!

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