Checking in With Jeremy Siegel

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Jeremy Siegel is one of the great ones. Anyone who has read Stocks for the Long Run knows that Siegel didn't succumb to the craziness of the late 1990s. From his desk at the Wharton School, this towering financial professor penned a piece that ran the week the Nasdaq hit its high in 2000. This memorable piece said that while Siegel remained a believer in the long-term value of stocks, the prices of the Ciscos and the Nortels had just gotten too nutty and he wanted everyone to sell tech. It was one of the most stark and prescient calls I have ever seen.

That's why I paid extra close attention to Professor Siegel's words as I shared a panel with him Sunday at Philadelphia's Society Hill Towers as part of a fundraiser.

First, Siegel told me he is more excited about equities and the future than he has been in years. He believes that the changes in the Senate that occurred with this election will herald a whole new era, an era where dividends will be more prized and sought after and many of the mistakes of the previous decade -- over-reliance on options for execs, stock buybacks made at too-high levels to prop stocks up -- will be a thing of the past.

Second, Siegel thinks that while we indeed had a bubble in tech, the bubble was contained to tech. That's the reason he thinks we have much less to worry about than they did in Japan, where the bubble encompassed all stocks and all assets. "They paid 80 to 100 times earnings for everything there, not just tech," he said, and he thinks that the tech focus of our bubble allows other areas to rise without hesitation.

Professor Siegel shares with me the desire to own stocks that pay good dividends, saying that the favorable tax treatment will benefit them inordinately. He also blessed my strategy of buying higher-yielding oil stocks, pointing out that recent work he has done (not yet published) shows that the major integrated oils have outperformed for the last 50 years and remain an excellent place to be. (I own and promoted at the talk Royal Dutch (RD - commentary - Cramer's Take) and ExxonMobil (XOM - commentary - Cramer's Take).)

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. At the time of publication, Cramer was long Nortel, Royal Dutch and ExxonMobil. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Click here to get Cramer's book, "Confessions of a Street Addict."

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