Wharton School professor Jeremy Siegel expressed a pretty bullish sentiment during a recent CNBC interview: the Dow could make it up to 20,000 by the end of the year.
That would represent another 17% gain from the 17,000 we hit earlier today.
At the very least, he claims, the Dow should get to 18,000.
He said during the interview:
“I think we’re going to get to 18 [thousand] and above. Could it go to 19, 20? It could. I’m not going to say that’s the likely event, but so many people have missed this bull market that they start saying, ‘Hey, you know, this is my last chance.'”
Such a projection is hardly surprising from the notoriously bullish finance professor. In October 2012 he explained what would drive the Dow to 17,000, and in March 2013 discussed why he expected the Dow to hit 18,000 by the end of 2013.
But according to Siegel, the difference between his claim last year and this year is the interest-rate “situation:”
“The so-called “New Neutral”, as Pimco called it, as Bill Gross calls it, really does — as he admits himself — argue for higher valuations in the market. So we shouldn’t just think 15, 16 [times earnings]… the old historical normals are normal anymore because if the interest rate is really going to be lower — and I do believe that — we’re looking at 18 and 19.”
However, he does believe that if the market hits 20-21,000 in the short run, then it “could be overvalued” because markets “often go beyond fair market value before they correct back down.”
Additionally, he believes that “in the short-run, in six months to twelve months” there could be a lot of volatility in the market.
Here’s the entire interview from CNBC:
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