The Conversion of Bill Gross

It's good to see a long-term stock market bear concede that stocks are not overpriced.

Over the years, I have frequently clashed with Pimco founder Bill Gross about his bearish comments regarding the stock market. Gross writes monthly commentaries that generate considerable buzz in the investment community. In September 2002, almost at the bottom of the bear market that followed the tech bubble, Gross posted a shocking column entitled “Dow 5000.”

“Stocks stink and will continue to do so until they’re priced appropriately … around Dow 5000,” wrote Gross, or about 3,000 points below the Dow’s level at the time. A few weeks later, the Dow Jones industrial average bottomed at 7286, and the index nearly doubled over the next five years.

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Jeremy J. Siegel
Contributing Columnist, Kiplinger's Personal Finance
Siegel is a professor at the University of Pennsylvania's Wharton School and the author of "Stocks For The Long Run" and "The Future For Investors."