Yes, You Can Time the Market!

  • ID: 2326401
  • Book
  • 208 Pages
  • John Wiley and Sons Ltd
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Praise for Yes, You Can Time the Market!

"‘Buy and hold’ makes sense for the average investor in stocks. Even better, say Stein and DeMuth, is to buy only when prices are low and hold when prices are high, keeping accumulating savings in Treasuries while waiting for ‘low’ prices. They define ‘low’ and ‘high’ prices by historical experience. An interesting and thoughtful analysis."
Professor Milton Friedman
University of Chicago, Hoover Center
Nobel Prize Winner in Economics, 1976

"Wall Street, prepare yourself. Ben and Phil hit the nail on the head with their insightful guide to investing. No gimmicks, no games, just tapping the true power of economics to make sensible investment decisions. Add to that the authors’ dry wit, and this handbook is a must–read for investors small and large."
Diane C. Swonk
Director of Economics, Chief Economist
Senior Vice President, Bank One Corporation

" The logic and reasoning are persuasive. Stein and DeMuth buttress them with evidence, lots of it. The term ‘valuable’ properly applies to the guidance of the conclusions."
C. Lowell Harriss
Professor Emeritus of Economics
Columbia University

"How refreshing to read commonsense advice about the stock market! Stein and DeMuth’s findings are both verifiable and free of quantitative trickery. What’s more, their writing is as clear and straightforward as the methods they recommend."
Martin Fridson
author, It Was a Very Good Year:
Extraordinary Moments in Stock Market History

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Chapter OneThe Impossibility of Market Timing 1

Chapter TwoThe Power of Price 9

Chapter ThreeThe Price/Earnings Ratio 29

Chapter FourDividend Yields and Market Timing 51

Chapter FiveFundamental Value 69

Chapter SixBonds, Price–to–Cash Flow, Price–to–Sales 87

Chapter SevenCombining Factors for Superior Returns 103

Chapter EightUsing Market Timing 135

Chapter NineLooking Forward: A Note of Caution 165

Appendix 179

Bibliography 183

Index 187

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Arriving a few years too late to slap some reality into the legions of day traders suckered by the stock market gold rush, TV game show host Stein′s latest is still a smart, commonsense guide to investing. Stein and DeMuth′s primary dispute is with the old adage that one can never tell when the market is going to go up or down, something they attempt to disprove with a wealth of charts showing how to buy stocks cheaply over the long term (as in decades). This is no get–rich–quick scheme, merely a case being made to, in essence, treat the Street like many fans treat baseball: work the numbers. In between the sizable chunks of data, Stein and DeMuth drop in bits of advice, e.g., pay more attention to the S&P 500′s trends than frequently slippery P/E ratios; invest in bonds before stocks–they′re more stable; and always, always buy low. Best of all is a three–page cautionary list that should be required reading for anyone even thinking of investing. Some of the better nuggets: "Does the word ′synergy′ appear in the prospectus?...Run!"; "Never accept any unsolicited financial advice"; and "Do not invest in a store because you see a lot of customers there at the mall or because you like the coffee or blue jeans or jelly beans. Sales do not equal profits." Again, where was this book when we needed it? (Apr.) (Publishers Weekly, March 24, 2003)

Stein may be known for the droll sense of humor he exhibits on his Comedy Central show, Win Ben Stein′s Money, but it is hardly evident in this straightforward investment guide. Writing with coauthor DeMuth, an investment adviser, the former Nixon speechwriter counters the "conventional wisdom" that investors cannot time (or predict) their investment decisions to maximize profits. The authors cite a number of technical factors – e.g., Tobin′s Q, price/earnings, dividend yield, price to cash flow, and price to sale – to show that careful study of these metrics demonstrates that some times are better than others for going into the market or buying a particular stock. They also show that protestations to the contrary, the "street" frequently times the market. Eighty tables and graphs are used to buttress their case. Stein′s popularity and the use of his face on the book′s cover may draw readers beyond the usual investment crowd, though some may find this joke–free treatment a bit too technical. Still, it is a competently written, well–argued case for a sensible investment approach and is quite suitable for academic and larger public libraries. Patrick J. Brunet, Western Wisconsin Technology Coll., La Crosse. (Library Journal, May 1, 2003)

"′s readable, coherent, sensible, good–natured..." (Barron′s, May 26, 2003)

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