In recent years, the word "bubble" has been tossed around so promiscuously it has practically lost meaning. Siegel pointed to the last time there was a real bubble in 2000, when the Nasdaq index was selling at 600 times earnings (if one wanted to call those financial figures "earnings.")

Siegel went out of his way to dismiss the popular perception that the Federal Reserve's easy monetary policy is creating a new bubble. If the Fed "were artificially inflating stocks," the stock market would be priced at 25 or 30 times earnings, not the current level of 17 to 19, as earnings swings and volatility change the figure almost monthly.

Interestingly, his views on current market valuations don't differ much from those of Arnott, who told an audience at Schwab's Impact conference in November that the market was expensive, but hardly in bubble territory. And the S&P 500 was about 10 percent higher then.

Perceived by some as a raging bull, Siegel concurred with many observers that investors should expect lower equity returns going forward over the next decade. But he predicted equities could generate real returns of 5.0 to 5.7 percent, not dramatically less than the 6.7 percent they have produced over the last two centuries.

What is driving his diminished expectations? Besides slightly high valuations, slow economic growth and the risk aversion associated with an aging population are two of the key determinants.

Flagging productivity doesn't help, either. One of the biggest questions perplexing economists at present is how the U.S. could add more than 500,000 jobs in November and December while GDP is expected to expand at a rate of 0.7 to 1.7 percent in the fourth quarter. "The collapse of productivity baffles economists," he said.

Looking out over the next decade, the Congressional Budget Office projects annual GDP growth will struggle to reach 2.0 percent. But Siegel noted that the big decline in expected real returns can be found in the bond market, where investors are likely to see 1.0 or 1.5 percent after inflation.

Deflation remains a threat. Nearly $2 trillion in American infrastructure is devoted to the energy industry, and until the price of oil started to collapse in late 2014, energy accounted for 30% of all U.S. capital spending.

The revolution in fracking is likely to place a ceiling of $60 a barrel on the price of oil. "We could thrive on that," Siegel said.

Under that scenario, equities look quite attractive. "I'll take 5 percent, or 4 percent," he declared.