Jeremy Siegel: Dow Could Hit 17,000 Next Year

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Stocks are still one of the best buys around with record highs possible for the next couple of years, Wharton finance professor Jeremy Siegel said Monday.

“They’re fairly cheap on an absolute basis. They’re extraordinarily on a relative basis, about the most relative cheapness I’ve seen stocks probably since the 1950s,” he said on “The Kudlow Report.”

Siegel predicted the Dow Jones Industrial Average has a 50 percent chance of hitting 17,000 by the end of 2013 and a 75 percent chance it’ll hit 15,000.

“In 2000, we were starting at a 30 price-earnings ratio. That was the most that the stock market has ever been in the world,” he said. “It’s not surprising the next decade is going to be bad when you start at a 30.

“When you start at a 13 price-earnings ratio, get back in history, the future is much, much brighter. We’ve never had bad stock returns over the next three, five, 10 years when you start with a 13 P/E ratio, and that’s the world of difference.”

The former adviser to 2008 Republican presidential hopeful Sen. John McCain of Arizona has long been bullish on the market. Making headlines for predicting Dow 15,000, Siegel recently upped his forecast another 2,000 pointsfor the end of next year.

Asked by host Larry Kudlow whether corporate profits would play a significant role in stock market returns, Siegel said they were not necessary.

Total Cost: $58,065Tuition: $43,840Room & Board: $13,980Fees: $245Claremont McKenna, located near downtown Los Angeles, accepted only 12.4 percent of its applicants for the class of 2016, a rate that admissions counselor Brandon Gonzalez said ensures that students here will be going to school only with other top students.�The class of 2016 will be one of the most talented groups of students we have ever seen,� The school will charge these students a tuition of $21,920 per semester, or $43,840 for the entire academic year, incurring a total cost of

“We don’t need corporate profits to grow for stocks to be great buys,” he said. “Any growth in earnings is an extra bonus to the stock investment.”

The Dow closed at 12,929.

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