On a steamy Thursday afternoon in mid-July, Wharton professor Jeremy Siegel is seated in a cozy booth at KPOD, a pan-Asian restaurant on the periphery of Penn’s campus. In a rare departure from his old-school formality, Siegel isn’t wearing a jacket and tie. Instead, he’s dressed in a blue button-down shirt, dark slacks, and a pair of spiffy walking sneakers. The look is casual for him — a concession to the oppressive weather. But in a restaurant full of summer students dressed in shorts, T-shirts, and flip-flops, Siegel still manages to be a paragon of dapperness.
We’d planned to meet for lunch the previous day, but CNBC asked Siegel, a longtime regular, to come on-air to talk about the latest inflation data. In two days, Siegel is supposed to fly to Copenhagen to catch a cruise with his wife, but with SAS pilots on strike, the trip is in jeopardy. He doesn’t seem especially bothered by the prospect of having his vacation plans derailed; in this summer of economic upheaval, there’s an insatiable demand for experts who can help the public make sense of the moment and the gyrations of the stock market, so while Siegel is eager to see the fjords again, it isn’t an ideal time for him to be out at sea. CNBC can send a mobile studio to his beach house in New Jersey; sending one to the waters off Norway isn’t an option.
Siegel, 76, retired from Wharton in July 2021, becoming a professor emeritus after more than four decades on the faculty. “Retired” perhaps isn’t exactly the right word — he gave up his teaching duties but is intent on remaining a very active presence at the School. Rather like the stock market itself, which has been the subject of his life’s work, Siegel is by nature forward-looking, and though he’s no longer sharing his legendary market commentaries with rapt students in Huntsman Hall, he shows no signs of wanting to slow down or retreat from the spotlight that first found him in the mid-1990s, when his seminal book, Stocks for the Long Run, was published.
Over a lunch of dumplings and bibimbap, Siegel talks excitedly about the pending release of the sixth edition of the book — the best version yet, he thinks. It’s been updated to include, among other things, ref lections on bitcoin and cryptocurrencies (“Competition for effective monies is good for society, as competition spurs innovation,” he writes); a chapter on the COVID-19 pandemic (Siegel says the crisis ended up reaffirming the wisdom of holding stocks for the long haul and notes that early warnings he sounded about the inflationary impact of the government’s fiscal response were prescient); and a chapter on ESG investing. (His verdict: “Some companies can do well by doing good,” and shareholder value doesn’t necessarily suffer from a company’s adherence to ESG standards.)
But while Siegel is as engaged as ever with the markets — he still wakes up at 5 a.m. and immediately turns on his Bloomberg terminal to get updates on the action overnight — he’s also happy to look back on his long tenure at Wharton. In addition to being the School’s best-known figure, he’s one of its most ardent champions — a fact reflected in the financial contributions that he and his wife have made to Wharton. He speaks with pride of the many years in which Wharton was ranked the country’s top business school and of the fact that it’s now harder for an undergraduate to gain admission to Wharton than to get into the College of Arts and Sciences. (Twenty years ago, the opposite was true.) His kindest words are for the 10,000 or so Wharton students who took his classes. Siegel expresses particular fondness for the Wharton undergrads he taught. As a group, he says, they were “smart, fresh, and really, really interested in the market.” The quality of Wharton’s student body made it hard to step away from the classroom, he adds: “I don’t think you could find a better set of students anywhere in the world.” But Siegel mostly feels a deep sense of gratitude for the career that Wharton enabled him to forge. “Wharton,” he says, “gave me everything that I wanted.”
Jeremy Siegel was born in November 1945. It was just after the end of World War II, and the Dow Jones Industrial Average stood at around 190. He grew up in Highland Park, Illinois, the son of a lumber merchant. As a child, he developed what would become a lifelong fascination with the stock market. He attended Columbia University and happily took advantage of the proximity it gave him to Wall Street. As he told the New York Times in 2001, “Friday afternoons, my classes ended early, and I would take the subway all the way down to Wall Street, and I would go visit and see the close of the New York Stock Exchange.” Watching the flurry of trading activity, he said, “gave me a thrill.”
Siegel initially majored in math at Columbia, but his fascination with the financial markets naturally spurred an interest in economics. Alas, the only economics class Columbia offered at the time was held at 9 a.m., and Siegel was disinclined to get out of bed that early. By his junior year, though, he was second-guessing his decision to focus on math. “I wanted something more practical,” he told me during one of our conversations this summer. With that in mind, he finally decided to sacrifice a little sleep and take the economics class. It turned out to be a propitious decision. “Within two weeks, I knew I wanted to be an economist,” he recalls.
Siegel had his pick of graduate programs, including at MIT, which had arguably the most prestigious economics department in the world at the time. A few weeks after he received an acceptance letter from MIT, he got a phone call from Paul Samuelson demanding to know why he still hadn’t replied; if you got into MIT, you were expected to go, and the famed economist couldn’t understand why Siegel hadn’t replied immediately. Siegel ended up pursuing his doctorate there, mentored by Samuelson and two other giants of 20th-century economics: Robert Solow and Franco Modigliani. He also became close friends with two fellow grad students who would go on to become leading scholars of finance themselves: Robert Shiller and Robert Merton.
At the time, however, the formal study of finance didn’t really exist. Siegel says Samuelson was intrigued by the stock market but regarded it as “a sideshow” that was disconnected from the real economy — the prevailing wisdom in economics back then. “In the ’60s, ’70s, and even the ’80s, there was a reluctance in the economics profession to take the stock market seriously as a macroeconomic factor,” says Siegel, who’s never taken a finance course in his life; everything he knows about the subject is self-taught. For him, the market remained an extracurricular pursuit while he was at MIT, and he ended up training as a monetary theorist. In the early ’70s, Siegel made an observation about price expectations and the currency futures market that ended up having important implications for foreign exchange traders and multinationals managing exchange rate risk. What came to be known as Siegel’s paradox stands as his most noted contribution to economics before he turned his attention to finance.
After earning his PhD, he was hired by the University of Chicago’s economics department. Its de facto leader was Milton Friedman, Samuelson’s intellectual rival. Siegel spent four years teaching at Chicago and forged a close relationship with Friedman; “I revered him,” he says. (When Friedman was awarded the Nobel Prize in economics in 1976, Siegel immediately hopped on a flight to Chicago to personally congratulate him.) But in Chicago’s economics department, senior professors tended to stick around, which made it hard for younger faculty to get tenure. When Wharton reached out in 1976 with a job offer, Siegel grabbed it. He already knew several people at the School, and from the moment he arrived, he felt he belonged. There was a strong spirit of collegiality, and as Siegel’s profile grew in the 1990s, Wharton was very supportive of his media appearances. As Siegel notes, that wouldn’t necessarily have been the case at other schools — another reason he feels a debt of gratitude to the School. “I never regretted leaving Chicago,” he says. “The positive feedback from the faculty, administration, and students at Wharton was more than I could have hoped for.”
At the start of his Wharton career, Siegel taught undergraduates and doctoral candidates but wasn’t involved with the MBA program. That changed in 1986. At the time, Siegel was moonlighting as the head of macroeconomic training at J.P. Morgan, traveling weekly to New York to provide tutorials to the firm’s employees. Word got back to Wharton that Siegel’s J.P. Morgan seminars were wildly popular, and he was asked to devise a macroeconomic course for the School’s MBA candidates. That course, which was also open to undergraduates, proved to be equally popular. It was held in the biggest classroom in Steinberg Hall-Dietrich Hall, and every seat was filled. Siegel began each class with a 20-minute recap of recent action in the stock market, which became a particularly cherished feature — so much so that Siegel began letting students who weren’t enrolled in the class attend. He says students pursuing jobs with investment banks were especially eager to sit in, since his observations helped make them sound fully informed and market-savvy to prospective employers. “They would attend my class in the morning before going to interview in New York in the afternoon,” he says.
Brandon Clark W14, who now works in mergers and acquisitions at J.P. Morgan in New York, says Siegel’s class was his favorite at Penn and set him on course for a career in finance. According to Clark, “Dr. Siegel” was a “very dynamic” presence, with an infectious passion for the markets and economics. But what impressed him most was Siegel’s accessibility: Despite his high public profile and the demands on his time, Siegel always made himself available to students and was happy to answer even the most basic questions. Clark has remained in touch with Siegel and has benefited from the career advice he’s offered. “Every time I have a big decision to make, he’s always there to provide insight and advice,” Clark says, adding that other Wharton grads have likewise found Siegel a valuable sounding board.
Fellow faculty members also speak affectionately of Siegel. According to Michael Gibbons, the I.W. Burnham II Professor of Investment Banking and Finance Department chair from 1994 to 2006, the warmth and generosity of spirit that Siegel brought to the classroom (and which Gibbons experienced himself as a graduate student at the University of Chicago, where he took one of Siegel’s classes) extended to his Wharton peers. “He’s a great colleague,” says Gibbons, adding that Siegel’s collegiality never waned even as his renown grew and the demands on his time exploded. But Gibbons also notes that the public prominence Siegel achieved ultimately redounded to Wharton’s benefit: What was good for Siegel’s personal brand was also good for the institution. “Jeremy is part of the face of Wharton,” Gibbons says, adding that his visibility — the media appearances, etc. — were “a great plus” for the School.
Another longtime colleague, Krishna Ramaswamy, the Edward Hopkinson Jr. Professor of Investment Banking and Professor of Finance, offers equally high praise of Siegel. “He is a very good and close friend of many of us,” says Ramaswamy, who first met Siegel in 1977, when he interviewed for a job at Wharton. (He initially went elsewhere, then joined Wharton’s faculty in 1985.) He says Siegel brings an encyclopedic knowledge of finance and economics to any conversation touching on those topics but is also eager to hear what others have to say and learn from them. “Intellectually, he’s very open,” says Ramaswamy — one way in which he has influenced his colleagues. “Many of us, on one issue or another, might have very strong views ideologically or analytically. But Jeremy has a very open mind to other people’s ideas, and that taught many of us to have the same open mind.”
Despite his reputation as a market maven, Siegel was never tempted to jump into the financial world. Years ago, he agreed to manage money for a few close friends but found it unpleasantly stressful. It was one thing to put his own money at stake; it was quite another to take risks with other people’s, and he found it hard to stomach the market’s oscillations. “It upset me so much,” he recalls. His takeaway was that he wasn’t cut out for the life of a professional money manager; “I don’t have that emotional makeup,” as he puts it.
But Siegel possessed at least one attribute critical to success as a trader: an exquisite sense of timing. He published Stocks for the Long Run in 1994, a year in which the Dow Jones Industrial Average finished at 3,834. Over the next six years, the Dow tripled in value on the back of the dot-com boom, and the stock market became a national obsession and pastime. Stocks for the Long Run, which showed that equities had historically outperformed bonds and made a compelling case for buying and holding stocks, tapped into the enthusiasm for the market but also helped stoke it. Thanks in no small part to the book, Siegel began making guest appearances on CNBC and Bloomberg Television in the late 1990s. His ability to provide clear, concise answers and his obvious enthusiasm for the subject matter impressed producers, and Siegel was soon a fixture on TV.
As David Leonhardt of the New York Times observed in 2001, Stocks for the Long Run “became both a cause and a symbol of the vastly increased popularity of the stock market.” Twenty-eight years after the book was first published, with the Dow at around 33,000, it’s fair to say that Siegel’s bullishness has been vindicated — as much as anyone else, he’s become associated in the public mind with the market’s long bull run. Combined, the five editions of Stocks for the Long Run have sold more than 300,000 copies worldwide. Along with retired Princeton economist Burton Malkiel’s A Random Walk Down Wall Street, it’s one of the two most influential books about the market and investing ever written.
According to Siegel, Stocks for the Long Run grew out of material that he collected for use in another book. In 1987, fellow Wharton finance professor Marshall Blume asked Siegel to collaborate with him on one marking the bicentennial of the New York Stock Exchange. As part of his contribution, Siegel compared the performance of stocks and bonds going back to the early 19th century, amassing a mountain of data. But the publisher ultimately decided it wanted a straight history book without lots of charts and numbers. Blume encouraged Siegel to use the material he’d gathered to produce a book of his own, and Stocks for the Long Run was the result. What Siegel found in his research was that over the previous 200 years, stocks on average had generated a 6.7 percent annual after-inflation return, far outpacing bonds, gold, and commodities. For buy-and-hold investors building nest eggs, equities were easily the smartest choice. (For more on Siegel’s relationship with the late Blume and a tribute to his memory, see “In Honor of Marshall Blume.”)
But Siegel has always emphasized that the fact stocks have historically performed well doesn’t mean they’ll always perform well. There have been plenty of bear markets on the road to Dow 33,000, and lots of periods of nerve-jangling volatility. And while Siegel’s long-term bullishness proved prescient, he’s the first to admit he’s no seer and has been fooled by the market. He says his worst mistake in all these decades of market-watching was not anticipating the 2008 global financial meltdown. “I did not see the financial crisis coming,” he says. “I did not know the banks held all that bad paper.”
According to Siegel, the Great Recession had a significant impact at Wharton. Up until then, the most sought-after positions for students were in finance, which served to reinforce the primacy of Wharton’s Finance Department, long considered the School’s crown jewel. Twenty years ago, says Siegel, “Goldman Sachs was the best job that you could get” if you were a business-school graduate. But Wall Street lost much of its luster after the events of 2008 and 2009, and Siegel says many Wharton graduates gravitated instead to the tech sector and venture capital. At the same time, Wharton has become so strong in all areas of business studies that its reputation as “the Finance School” only tells part of its story. Siegel says there’s “a little friendly friction” among the departments at the School, but competitive kidding aside, he stresses that the quality Wharton now exhibits in areas like management, marketing, and entrepreneurship has made the School as a whole much better.
Even as other departments caught up with finance, Siegel remained Wharton’s most prominent figure, and his legacy is formidable. Reached via email, Patrick Harker, who was Wharton’s dean from 2001 to 2007 and now serves as president of the Federal Reserve Bank of Philadelphia, notes that he still benefits from Siegel’s insights in his current role as a policy maker. “As Dean of the Wharton School, I only wished I had the power to clone great faculty, especially Jeremy Siegel!” Harker writes. “His teaching is legendary, and he has left an indelible mark on Wharton and the generations of students who benefited from his wise analysis of markets and the economy.”
After Siegel and I finish lunch, he shows me around Huntsman Hall, proudly pointing to the wall where he and his wife are listed among Wharton donors. As we walk through the quiet corridors, past his old office and a favorite conference room, it’s hard not to detect a certain wistfulness in his voice. Siegel acknowledges that the pandemic has made the past few years difficult. When Wharton was online, he missed interacting with students and colleagues. Before COVID, he would come into the office even on days he wasn’t teaching to have lunch with fellow faculty members. Sometimes, it was just one or two; other times, it was a larger group. Siegel says the conversations were always stimulating and became a cherished ritual. After COVID hit, he and some colleagues moved the lunches online, but it wasn’t the same. When in-person lunches resume, Siegel expects he’ll be a regular presence again at Wharton. Ramaswamy, for one, welcomes that prospect. “I hope he stays with us for a long time,” he says of Siegel. “He contributes so much, and we learn so much from him.”
Michael Steinberger is a Delaware-based journalist and a contributing writer for the New York Times Magazine.
Published as “The Icon in Winter” in the Fall/Winter 2022 issue of Wharton Magazine.