Siegel: Stocks 10% to 15% Below Fair Value

While stocks have stumbled out of the gate in 2014, Wharton’s Jeremy Siegel doesn’t think the declines are a sign that the bull market is ending. “While I still think there’s a push in the markets, I still don’t think the public is back,” Siegel told CNBC. “I mean they’re tiptoeing in, but when you look at the flows into the equity funds, it’s not there. … We have to bring them much more in until we get to the top of a bull market.” Siegel says his fair value estimate for The Dow Jones Industrial Average is 18,000-18,500, which is about 10% to 15% above current levels. Siegel also talked about interest rates and whether increased borrowing could lead to a jump in the velocity of money, and inflation. “Short-term rates are going to stay near zero, that’s going to keep that velocity down,” he said. “We really have to push the economy and inflation to get the velocity up. It’s not happening soon.”

Screen shot 2014-01-23 at 3.59.35 PM