Well-known finance professor Jeremy Siegel took issue with bond guru Bill Gross’ pronouncement that "the cult of equity is dying," telling CNBC that stocks still provide the best long-term investment.
"I will grant that the last 10-12 years have been poor years," Siegel said on "Street Signs." "We started from the most overvalued market that we had in the last century and we've gone to not the most undervalued one but a market is valued lower than the long-run average."
In his monthly market analysis, Pimco’s managing director Bill Gross took aim at the Wharton School of Business professor’s belief that stocks have averaged a 6.6 percent annual gain over the past century, calling it little more than a "Ponzi scheme."
Gross argued that it was unsustainable for stock market returns to outpace economic growth, especially in the current environment of uncertainty.
Siegel, however, insisted that investors “definitely can have a return greater than GDP growth, there is nothing un-economic about it.”
Contrary to Gross’ argument that such returns are “skimming off the top” of actual economic activity, Siegel countered: "Capital has to give you a return above growth. Even in a no-growth economy you're going to get some growth on capital," he said. "So it's not an anomaly, it's not inconsistent to get that phenomenon."
TUNE IN: Bill Gross will appear live on CNBC's Street Signs at 2pm ET, Wednesday, August 1