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CNN Live Today

Interview With Ben Stein

Aired May 23, 2003 - 11:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LEON HARRIS, CNN ANCHOR: The stock markets are on a post-war tear now. Yes, you can time the market, says our guest right now. That happens to the title of his book, "Yes, You Can Time the Market." That's from the money guru Ben Stein, former TV game show host, who is joining us now to talk some serious stuff here, talk about making some more green.
Good to see you, again, Ben. How are you?

BEN STEIN, AUTHOR, "YES, YOU CAN TIME THE MARKET": Honored to be here. Thank you very much. How are you?

HARRIS: I'm amazed at you. It seems like you're putting out a book every 15 minutes now. Last time you were here, you had another book out about the rules about how to ruin your life. Now you have come up with this one, just a matter of a few weeks later.

STEIN: No, no, no. It's about eight months or ten months later.

HARRIS: Well, tell us...

STEIN: Time flies when you're having fun. That's for sure.

HARRIS: I guess so. I cannot believe that you think people can time the market. Every single expert -- every single expert we've had on, Ben, says you can't do that.

STEIN: You cannot time the markets short term. You cannot time it over the period of a week, a month, a year, but you can time it over 10, 15, 20 years. The data for the last 100 years is overwhelming that if you buy low, and we make it clear when low is, according to price to earnings ratio, price to dividend ratio, price to (UNINTELLIGIBLE) value, price to sales, price to cash flow, price to replacement value, even price to 15-year moving average of price, you will make enormously more money, but only over long periods. Don't come yelling to me if you don't make more money in a week or a year. It is only over 10, 15, 20-year periods.

HARRIS: That doesn't sound so revolutionary, then, because a lot of people have been saying for the longest that that is the way to do it. You will make money if you stick it out for the long term.

STEIN: Here's what is revolutionary about it. Everyone has said buy low and sell high. Everyone always says that. No one has ever before quantified when low is and when high is, and we have broken it down month by month for a hundred years. And in the book, we tell you when you'll be buying low by standards of the last 15 years, or last 100 years, and you just have to sort of plug in where the data is this week from Barron's, say, and compare it with the data in the book, and you will know whether it is a good time to buy. And we don't say that there's ever a terrible time to buy except when the market is stupendously high, which the Nasdaq is, but we do say there are times you will make much more money than at other times. The Nasdaq, at this point, is just rolling the dice.

HARRIS: You think it's still too high?

STEIN: Oh, it's so much too high, it's insane. It might still go up, because after all, bubbles can last. We're clearly in a second Nasdaq bubble, but the Dow is not badly priced. The S&P is way overpriced. The Nasdaq is wildly overpriced, but as I say, we may be going into a second bubble and it may last, but when you're in a bubble, you're at a party and the bubble stops at midnight, and there are no clocks in the room. That's what Warren Buffett says and it is true. So beware of the second Nasdaq bubble.

HARRIS: Yes, but you know what? Whatever plan you do follow to invest in the market, whether it is staying in for the next 15 or 100 years or whatever, doesn't it all depend on how truthful the information that you are using to gauge these different stocks, different investments actually happens to be? We've had problems with that.

STEIN: We've had very serious problems. You're raising a vital question. That is why we don't say to buy individual stocks. We don't believe you can trust any individual stock, but we believe if you buy the whole index, the Dow 30 or the S&P 500, at least enough of those people will be telling the truth, so that you will get some honest data, but we do not recommend buying individual stocks. Part of the reason is we don't believe you can pick them or tell the future. The second reason is we don't believe the data. The data coming out of them is very questionable.

HARRIS: All right, folks, and you don't have to be a Harvard grad to understand the book, folks. I got through some of it this morning myself.

Thanks, Ben. Appreciate it. The book is...

STEIN: Honored to be here.

HARRIS: ... "Yes, You Can Time the Market" by Ben Stein and Phil DeMuth.

STEIN: Honored to be here, sir.

HARRIS: All right. Talk to you later on. Take care.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired May 23, 2003 - 11:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: The stock markets are on a post-war tear now. Yes, you can time the market, says our guest right now. That happens to the title of his book, "Yes, You Can Time the Market." That's from the money guru Ben Stein, former TV game show host, who is joining us now to talk some serious stuff here, talk about making some more green.
Good to see you, again, Ben. How are you?

BEN STEIN, AUTHOR, "YES, YOU CAN TIME THE MARKET": Honored to be here. Thank you very much. How are you?

HARRIS: I'm amazed at you. It seems like you're putting out a book every 15 minutes now. Last time you were here, you had another book out about the rules about how to ruin your life. Now you have come up with this one, just a matter of a few weeks later.

STEIN: No, no, no. It's about eight months or ten months later.

HARRIS: Well, tell us...

STEIN: Time flies when you're having fun. That's for sure.

HARRIS: I guess so. I cannot believe that you think people can time the market. Every single expert -- every single expert we've had on, Ben, says you can't do that.

STEIN: You cannot time the markets short term. You cannot time it over the period of a week, a month, a year, but you can time it over 10, 15, 20 years. The data for the last 100 years is overwhelming that if you buy low, and we make it clear when low is, according to price to earnings ratio, price to dividend ratio, price to (UNINTELLIGIBLE) value, price to sales, price to cash flow, price to replacement value, even price to 15-year moving average of price, you will make enormously more money, but only over long periods. Don't come yelling to me if you don't make more money in a week or a year. It is only over 10, 15, 20-year periods.

HARRIS: That doesn't sound so revolutionary, then, because a lot of people have been saying for the longest that that is the way to do it. You will make money if you stick it out for the long term.

STEIN: Here's what is revolutionary about it. Everyone has said buy low and sell high. Everyone always says that. No one has ever before quantified when low is and when high is, and we have broken it down month by month for a hundred years. And in the book, we tell you when you'll be buying low by standards of the last 15 years, or last 100 years, and you just have to sort of plug in where the data is this week from Barron's, say, and compare it with the data in the book, and you will know whether it is a good time to buy. And we don't say that there's ever a terrible time to buy except when the market is stupendously high, which the Nasdaq is, but we do say there are times you will make much more money than at other times. The Nasdaq, at this point, is just rolling the dice.

HARRIS: You think it's still too high?

STEIN: Oh, it's so much too high, it's insane. It might still go up, because after all, bubbles can last. We're clearly in a second Nasdaq bubble, but the Dow is not badly priced. The S&P is way overpriced. The Nasdaq is wildly overpriced, but as I say, we may be going into a second bubble and it may last, but when you're in a bubble, you're at a party and the bubble stops at midnight, and there are no clocks in the room. That's what Warren Buffett says and it is true. So beware of the second Nasdaq bubble.

HARRIS: Yes, but you know what? Whatever plan you do follow to invest in the market, whether it is staying in for the next 15 or 100 years or whatever, doesn't it all depend on how truthful the information that you are using to gauge these different stocks, different investments actually happens to be? We've had problems with that.

STEIN: We've had very serious problems. You're raising a vital question. That is why we don't say to buy individual stocks. We don't believe you can trust any individual stock, but we believe if you buy the whole index, the Dow 30 or the S&P 500, at least enough of those people will be telling the truth, so that you will get some honest data, but we do not recommend buying individual stocks. Part of the reason is we don't believe you can pick them or tell the future. The second reason is we don't believe the data. The data coming out of them is very questionable.

HARRIS: All right, folks, and you don't have to be a Harvard grad to understand the book, folks. I got through some of it this morning myself.

Thanks, Ben. Appreciate it. The book is...

STEIN: Honored to be here.

HARRIS: ... "Yes, You Can Time the Market" by Ben Stein and Phil DeMuth.

STEIN: Honored to be here, sir.

HARRIS: All right. Talk to you later on. Take care.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com