Yes, You Can Time the Market!

This is not a book for traders, but for long-term investors. With wit and wisdom, Stein and Demuth prove their point: long-term investors must pay attention to market cycles. If you buy when the market is high, you are all but guaranteed to wind up under water. You could be buying the best company in the world--it does not matter. Pay too much, and you'll be burned. The investors of the 90s forgot about market-timing.Wall Street told them it didn't matter, and they followed that advice-- to their eternal regret. As another reviewer has pointed out, Wall Street's salesmen want to sell stocks now. Caveat emptor if you pay too much. Maggie Mahar's "Bull! A History of the Boom, 1982-1999: What Drove the Breackneck Market and What Every Investor Needs to Know About Financial Cycles" fleshes out the story and gives investors some sound advice on what to do next. Read both books.

Stein and DeMuth succeed impressively in their primary aim, which is to prove that there are better times than others to invest in the stock market, and that a market timer who pays attention to the signals they describe can achieve significantly higher returns than a steady investor who buys in regardless of price. To determine whether the market is over- or under-priced, they rely upon valuation methods that will please the heart of a classically trained economist or business school student: price, P/E ratio, dividend rate, and price-to-book, comparing today's figures to the 15-year moving average. Examining the performance of the S & P 500 over the past century, they convincingly prove that a strategy of doubling up investments in "buy" (under-valued) years and avoiding investing in over-valued years delivers superior performance to a buy-and-hold (or dollar cost averaging) strategy.Although what Stein and DeMuth have proven seems like common sense from one angle (buy heavily when prices are low), it is not what most of Wall Street and the financial press urges investors to do. Nor is it emotionally easy to follow this advice, since it means buying at times such as the middle of the Great Depression, when the popularity of stock market investing is at its lowest ebb, and it means avoiding buying when the market is zooming to the moon, and it seems as though every neighbor of yours is making a fortune in Internet and telecom stocks (the late Nineties). Stein and DeMuth do a great job describing these situations, to provide the internal fortitude needed to follow a buy low strategy.The debate over this book arises over how applicable it is to the average individual investor (its target audience). All the research conducted by Stein and DeMuth concerns the S & P 500, and they freely admit that the conclusions they draw do not necessarily apply to other indices, markets, or individual stocks. Furthermore, they look at 20-year results, so the final verdicts for the last 20 years (including the bull market of the `90s) are not in yet.However, Stein and DeMuth cite many others studies that are aligned with their general strategy of buying under-valued stocks, and summarize the superior results that these other studies report. Because of this, and the book's sharp wit and hard-hitting style, this book is a great introduction to value investing and the fundamental methods of valuing stocks. The boom and bust of the late Nineties and early 2000s prove that far too many investors (and professionals) don't pay enough attention to stock market valuation.This book won't tell you how to make a quick fortune. It won't tell you how to identify the next Microsoft or Dell Computer. But it does tell you how to identify better times to invest in stocks, and can help you avoid huge losses from investing in bubbles. Because of the strength of the book's advice, which recent history proves is so often ignored, and the fact that it is a short and entertain

This exceptional book is a must-own for anyone who is serious about investing. I would still give the book 5 stars if all it did was prove its thesis in a highly readable fashion that, indeed, the market can be timed. Or, if all it did was show you why it's not smart to put your money into index funds or to buy stocks willy-nilly at any time of year. The book does all of that -- i.e., tell you why and how the market can be timed and prove it in succinct clear prose -- but it does more: while Stein and DeMuth guide you effortlessly through the trees, you feel like you're seeing the forest (and you are). You'll come away from this book knowing how and why to invest your money today, while understanding the entire market from the beginning of the 20th Century. I can only think that Ben Stein and Phil DeMuth had a large staff of folks to compile a colossal amount of information -- essential information for any serious investor -- and then the two of them distilled it all down and made it easy to consume. As I said, this information alone would make the book worth 5 stars (and indeed makes it a steal at its current price), but it's worthy of 5 stars "plus" because of the presentation. A few weeks ago, The Wall Street Journal reviewed four new books on investing, this one being one of them. Of the four, the Journal liked this book best. It's really a great piece of work.

Okay, we all know Ben Stein is a smart guy from Win Ben Stein's Money. What I did not know was that he and apparently his co-author Phil DeMuth know a fantastic amount about investing. He has studied it at Yale and Columbia and been a major commentator about it in Barrons for twenty years. The results are impressive. This is a book about investing for the long term, and it makes total sense. It says not to base your buys on fads and chat rooms or day trading gambles, but to use the basics of earnings, dividends, book value, sales,and long term price trendsto find out whether stocks are cheap or expensive, and what your prospects are for major long term gains based on historical criteria, not on guesswork.If I had known this stuff I would never have gotten caught in the bursting of the bubble in 2000 and with it, I will never get caught with my pants down again.If I had to recommend only one book to long term investors, it would be Yes, You Can Time The Market. I think the people who gave it bad reviews must be day traders looking for the next bubble. This book is not for them. Yes, You Can Time The Market is for serious investors who want to make money without taking insane risks. get it and grow rich slowly but surely.

I am young and very new to the world of investing so after seeing Ben promoting the book on TV a few days ago I decided to read it. I found it so interesting and incredibly straight forward that it seemed to take no time to finish. I don't see how anybody could deny that you CAN time the market (in the long run). It contains an incredible amount of good advice. I've cracked the covers of many investment advice books and I simply have not found another so straight forward and easy to comprehend.