Wall Street Week With Louis Rukeyser - 20 Years

Twenty years of Wall Street Week With Louis Rukeyser. Twenty years of Wall Street Week With Louis Rukeyser is made possible by the travelers insurance and related financial services working to provide financial peace of mind for American business by Enron providing natural gas which holds the promise for a cleaner world and a more energy independent America corps. And the Enron foundation and vie for eventual bait securities rock solid market wise. This program straight week is Louis Rukeyser. Maybe I'm with you guys here.

It was 20 years ago before Dan Quayle before Federal Express and fax machines before cable television or personal computers. It was precisely two decades ago that I hosted the first edition of What for millions of viewers would become a weekly staple. How long ago was November 20th 1970. Well it was a time when there was a vicious argument going on in the United Nations about whether Red China should be admitted. It was a time when Americans were prohibited from owning goal of the Vietnam War was still raging and the Dow Jones Industrial Average had yet to reach 1000. The Beatles had broken up several months before and I hadn't quit my day job. Good evening. I'm Louis routinized. Tonight we're going to take a close look at the high cost of living Americans calling their number one domestic problem. They're angry and confused. We're going to see if we can find out who is responsible and what you can do to help stop it.

Well we were all younger then. I was working as network TV's first economic commentator for ABC News. After many years as a political and foreign correspondent for newspapers and TV all over the globe. And I was just moonlighting as host of this fledgling program until 1973 when I left ABC and went out on my own. We've had our regular Friday night date ever since. Unfortunately for true connoisseurs of ancient styles in hair and clothes no one kept a videotape of our first program back in 1970 or of most of those in our first few seasons. But we'll have plenty of giggles along the way for the sadistic during the next hour anyhow. During the first three years of the series as it happens we went off the air during the summers and it wasn't until October 1973 that we went around. In fact for the first 13 months of the program we weren't even national until January 1972. We were seen only on stations of the Eastern Educational Network a loose consortium of public

broadcasting outlets that extended from the Canadian border to Washington DC. The program proved unexpectedly popular in a nation hungry for useful pocket book information and it wasn't long before we started attracting national attention and big name guests. H Ross Perot voiced a concern back in 1973 that could be echoed today. First thing we've got today is realize that the market is only likely if the individual investor is in the market now that a lot of people are the bankers and those who love to see him down there. The biggest attention was very attractive and stellar track to have US law our Investor Day was essential to provide liquidity in the market. Many in Wall Street would now be laid at least say amen. We're light years technically ahead of where we were when we first went on the air during one program in 1973 we lost our picture because one hunter shot out the video feed we were sending of a man who would become one of our favorite guests. Merrill Lynch is Bob

and America got only his ordeal. I've heard of people objecting to a picture on television but this was ridiculous and it was we think an accident. That sort of formal doesn't happen very much anymore thankfully because there have been a whole host of great moments that we wouldn't want to lose. Take that time in November 1975 when two of the world's leading economic figures men whose influence would grow even greater in the years ahead. Were my guests in consecutive weeks. Let's turn to the rest of the economy. You said earlier this year that you would be mightily concerned that the deficit in the federal budget went over 80 billion dollars according to Congress's reckoning this week. It's likely to top seventy two billion. How concerned are you. Is this likely to destroy our recovery from recession. Well I think it's big. I don't think it's going to destroy the recovery from a recession and the trouble with these deficits is. Not so much the size of the deficit today when there's a lot of. And utilize capacity in the economy.

But are we on a course that carries us continuing along with these kinds of deficits as the economy does recovering economy is. Has begun to recover it's been recovering rather vigorously for some months. Time looking ahead to begin seeing reducing the deficit and I would remain very disturbed of those deficits when we move ahead in as we kind of remove. We have to balance our social aims and desires against our investment needs. The more you spend in the social area the less you'll have to spend in investment. Investment means jobs and you're going to have to watch a tradeoff here where you go for one the less you'll have on the other. And the only way you can make it up for your social aims is to have the government of United States spend the money. And there in lies the problem if the government decides to come into the capital markets in a large way there's less capital available for everyone else. If the government cuts back on its desires there will be enough capital to go around and not a word about Nancy Reagan and her astrologer over the years

we've done a nine hundred fifty six programs with nearly 700 different guests and no one could possibly count the number of predictions made here. Some of them have been amazingly accurate. How serious is the energy crisis. Lou it's large. It's going to be with us for a long time. It's going to be a fact of life which we have never experienced before which is going to change our way of life. And the future of our industrial society. And then it's our it's my own personal belief that you're going to heaven and saw our age and inflation. And I believe that the period of the 1970s will go down as the worst period of inflation in this country's ever had even in the 1970s when investing in stocks was out of fashion. There were still some brave souls who correctly saw the great bull market of the 80s

coming all along and some people incorrectly regard you as a bear because you were correctly pessimistic at certain junctures including 73 but in fact you've just given us a pretty optimistic viewpoint. And I've heard you talking about even higher figures for the ultimate future do you still see 3000 4000 5000 or we as every generation has its big bull market that blows up we had in the 20s we had in the 50s and 60s were good in the 80s and 90s. In the 80s we will be twice or more where we are now then three times four times three or four times. This will be the last century and the last decade in the sense in which you can buy the Dow Jones below 1000. The last decade the last how long do we have to wait for 20 100 on the Dow. I think within the next decade will see that as the 80s began stocks still languished but there were some courageous bulls who bought when others wouldn't.

Last August I had a comment about the Dow being at perhaps seventeen hundred by 1985. But three years ago I made a guess this is just a guess but I thought that in this decade it might be somewhere between 25 and 35 hundred. I am quite positive about the stock market over the next decade and I see a stock market in historic perspective that is very very undervalued in terms of fundamental things like book value and earnings. And to me if we just return to a normal multiple in the next decade which is 14 and a half times earnings and have only 3 percent earnings growth you'll see the bow in the neighborhood of twenty five hundred to three thousand ten years from today. How high we're going to go. I would say there's a better than even chance that within six seven or eight years we will see the Dow Jones Industrial Average sometime above 3000. They left Templeton's protection then but they aren't laughing now. In the fall of 1991 many of us chuckled at one of the most unusual guests we've ever had

around here. But some of his seemingly wacky predictions turned out to be astoundingly on target. I'm a little confused he said we're in a bear market but earlier you said we were going to be in a bull market. When and when do we get out of the bear market into the bull market. The end of the bear market. The earliest I can count it is about August 26 1982. It might be a little later where we go lower than we've been between now and then probably but I'm not one of these 600 boys. I think. 750 to 70 is more like. The range of the final low. August 26 1982 How do you pick the day like that. And can you tell me precisely what time you are you know about seven or eight is the count for the middle section. The standard time

span ands. Which appeared in the encyclopedia of stock market techniques. But you're thinking the exact day of a low or a high is usually the done by the count from the middle section. Your predictions are so specific and so long range that I think the remarkable thing is not that you're sometimes wrong but that you have a right. I think you're absolutely incredible. Lindsay was right almost to the day the bull market began on August 13th 1982 with the Dow now at seven hundred seventy six point nine to just after the bull market began. We had one of the most widely followed stock market strategists on the program. And he saw the long range picture clearly. Barton is this big summer rally for real. Yeah I think so. Why. Well I think it started from my level when stocks were as cheap as they have been at any time since the 1930s and the

combination of that plus the combined in interest rates has given people some confidence that the world is going to hold together and that the decline in inflation is meaningful and that the 80s are going to be a decade of appreciation for a long term financial asset prices. BARTON You have been saying that for a long time. Why did the market suddenly agree. I finally saw the light. And there was other good counsel along the way. Is this real bull market or is it just a short run. It's been a bull market since 1974. I think that it is going to continue to be a bull market into the late 1980s. I think we are in a period that is similar to the 1949 to 1968 period and say we will keep going until most stocks are overvalued and till stocks are really popular

with and over own by both the individual and the professional investor how long do you think people should sit stocks. Well I think you can. It varies there are some bold trends that last eight or 10 years and there are some bold trends that only last a year or two right now. I think for the big stops the join the bull market in 1980 and I'm talking about the big blue chips that are in the Dow. I think that they are going to be the leadership stocks going into the late 1980s the 80s were a great decade for stocks and bonds as Broughton Biggs and Bob flower predicted. But there was a frightening interruption during 1987 and the very Friday before Black Monday. One of our panelists. So what have you been looking for a bear market perceive been. Really in my own mind looking for a crash but I didn't want to talk about it publicly because it's like shouting fire in a crowded theater. And there's other ways to play it you just took your strategy negatively and you shut your mouth. I don't look for a long bear market you're only look for

a brief decline but a vicious one. So I guess as one of the best long term records in the business and courageous calls such as that one have added to his reputation. In fact by early the next week the market crash had indeed hit bottom. The comparisons between 1987 and 1929 were everywhere. The following Friday with gloom and panic all around I began the program by trying to calm everybody down and put things in perspective. OK let's start with what's really important tonight. It's just your money not your life. Everybody who really loved you a week ago still loves you tonight and that's a heck of a lot more important than the numbers on a brokerage statement. The robins will sing a crocus is will bloom babies will gurgle and puppies will curl up in your lap and drift happily to sleep even when the stock market goes temporarily insane.

And now that that's all fully in perspective let me say I watch. And eek and medic. Guests on this program regularly make predictions about the industries they cover and looking back an impressive number of them have kept our viewers years ahead of the crowd. One of the remarkable features about the semiconductor industry in addition to the volatility to which Dan just referred is how much they have brought down the cost of their products a rarity in the inflation and the. Transistor costing $20 916 now has its job done by a much smaller transistor that might cost a tenth of a penny. Other dramatic technological advances like that still in store. Yes we're really I think at the beginning this is almost a new industry it's only 28 years old. I think we have really barely scratched the surface of what can be done with semiconductors. The secret of growth is what you describe constantly lowering costs which offer constantly lowering prices. And I think.

The technology is in place to keep prices going down for at least the next decade. I gather that the hot new were in the industry is microprocessors would you define it for us and tell us why it's hot. Yes the microprocessor is not simply a full fledged computer on a single chip of silicon about a fifth of an inch by a fifth of an inch. And it is a revolution in the computation. It allows you to have a computer for the price of about $10. I predict Louis that five years from now you're going to have a microprocessor in your home in your car on your wrist in your telephone and perhaps in other places. Well I certainly hope not. I think the movie industry for the next oh let's say three to five years in terms of theatrical viewing in the it is I believe it's going to continue to be approximately flat in the woods two and a half to three billion dollars a year will be spent on it. However I think that the actual viewing of

movies is going to increase dramatically as it has been doing over the last five years. This is going to happen on video cassettes this is going to happen on pay cable in five years what's going to be the most inefficient difference in TV from today in five years what's going to be the most. There will be four major networks. Fox will be the fourth Wolfgang to miss who is just the made up Vice President of Morgan Stanley is making his fourth appearance in four years on this program which shows what we think of his consistently highly rated analyses of aerospace and defense stocks. On his last appearance as my guest in May 1980 I asked him what further events might be anticipated on the international security scene and he replied and I quote. Well God only knows Iran invading Iraq Libya trying to bump off President Sadat various things which affect our interests fairly directly. Well if that kind of precision in public forecasting is rare anywhere on any subject. What is your crystal ball tell you now about the international scene.

Hope for peace will break out as we proceed during the course of the year. The mesh was a little early but remember you heard it here first. Alan Greenspan has been a frequent guest and an outspoken one too. It seems to me you're suggesting that we are going to go a little bit downhill as well that I correct. I think so yes I think that when you begin to look at the world of the 1990s I think the United States comes down a notch or two where we live worse or just live not as relatively better I think not as relatively But look you know there are a lot of talk about the United States losing its sort of per capita income. Of leadership in the world. But the real issue is that you know average American household has got the best homes in the world. It's got the best sets of appliance the best telecommunications. The average American still lives far better than the average anything else. Trouble is is that the gap which we used to be huge is now beginning to know what's going on now for

the. Thank you Mr. Chairman. I could go on all night about some of the great people we've had on here or some who thought they were two of our viewers favorites and mine too. Or a couple of old friends Milton Friedman and John Kenneth Galbraith among world class economists. The short and the long the right and the left. Now we only have about a minute left. Let's see if we know how to got a little bit. Should we abolish the Federal Reserve Board. Yes. What would you replace it with a computer and what would you tell a computer to do. I would tell the computer to see to it that the money supply goes up at exactly 2 percent per year or as closely or to as you can manage on a week by week month by month year by year basis. Is there any form of government regulation that you favor. Absolutely. There are many forms I favor the form of government regulation which says that if you murder your wife you go to jail. I favor the form of government regulation which says you have to drive on the right side of the road. Can you have never lost faith in the power of government to economic

ills. But most of the country apparently has. How do you explain that. Well there's no doubt about that. My generation is responsible. Throw the Keynesian revolution the welfare revolution. A great many Americans a majority of Americans have become comfortable happy. And inevitably conservative. Base those that vote. On notices that while people of law lost faith in government as you say that doesn't apply to when some measure of affluence is involved. There's been no loss of faith in government want to come said bailing out those asinine else well loss of faith in government as far as Social Security is concerned. Farmers are still committed to a very great faith in government for maintaining price supports and farm income. But

I would point out that the faith in government is still very high. Except as regards the most unfortunate of our people. And I would like to see a little more faith as there as as regards that. As any regular viewer knows around here we don't just talk about stocks and bonds. And the thing that affects you and your money is grist for our mill. And over the years we've discussed the dramatically changing world economy with some of the planet's most powerful business executives here and abroad. Bill whatever possessed your bank to make so many questionable overseas loans. Well I think Lou you have to put this in a perspective that we are indeed a major international bank. Engaged in an international banking business and that it is our job to make productive loans and by and large if you look at history the loans made overseas were for productive purposes were for good solid

programs for economic expansion which were not only important to the recipient countries but indeed to the entire free world. I understand that but surely when the door is shut and you're talking to your staff you must be doing something to make sure this doesn't happen again. What are you doing. Well I believe very strongly that the problem you refer to is manageable is indeed being managed and solved. How much of this overseas debt in your judgment will never be paid back. I think all of it will be paid or what I would rather call service to well-managed banks have ridden through the greatest roller coaster in the last 15 years than anyone has ever seen and come through it's beamy well so I think the fear is misplaced but why did you make so many bum loans to third world countries. Well the interesting thing about the bum loans is that they are all being serviced and paid while the good American real estate made it to people who spoke English and

Chicago are in deep dark trouble. Are you saying that this is this is not a problem that's going to land on the American taxpayer. No it will not land on the American taxpayer. Some of the loans will not get paid just as someone might get paid in every other sector of the economy. But the relative size of those opposite the relative size of basket is getting smaller every day. Is Japan an unfair player at the World Economic game. I don't think so because maybe that is a difference on the viewpoint. For example from us sometime mommy can do fear for example a married couple with the money for export by the way and buying from Japan or them will be under increasing so or such as for us the fit with his company's market share erode in General Motors Chairman Rogers

Smith came on the program in 1987 to predict an end to GM slide. Roger why is GM losing market share and when if ever is that decline going to stop. Well I think what's happened of course all of us have been caught up in this worldwide competitive business I think it probably had to do is look at Steel electronics it's a it's a very very tough world out there now and certainly we've lost some market share but I think we're about ready to turn that around with some of the new products we're bringing on stream. Since that broadcast GM share has fallen further and Roger Smith has retired as chairman in March 1995 in the same week he was on the cover of Time. Boone Pickens the most feared corporate raider of his time came on to defend his form of investing. You say you are the champion of the still small stockholder of the British corporate rate rater said James Goldsmith says and I quote him. They does it takeovers or quote for the

public good. But that's not why I do it. I do it to make money. Isn't that really your number one motivation would be be sitting here lying to you if I told you that we did not expect to make money out of these deals at the same time if you'll go back and look at what we've done with the stockholders and you know it. If you just take the poor deals we're talking about there are 13 billion dollars in profit that profit went right back into the basic company and it's moved around very quickly some back into stocks and whatever else but it creates jobs it does a lot of things in America. So I like to see that capital move around and I like to see people make money off of these deals and they do. I don't like to see managements that their stock sale at a huge discount to praise but that does annoy me. In putting this program together we were most surprised and delighted by the discovery that some of the best investment ideas came not necessarily from guests and panelists but from viewers. Most weeks we answer three letters from viewers. And yes the

panelists do know the questions in advance so they can research their answers. There's been some truly memorable questions over the years on Capitol Alan Elliot of course from New York says he's looking for what he calls undervalued growth stocks and he'd like an opinion of companies involved in the video games and video recording industry. Going to answer a lot of I think video games is the rigging of your television set to play electronic hockey or electronic tennis and it's a growth area 3 million said so last year. That's up 10 times from 1975. But it's a tricky area and the company I like in this area and I think there is growth here would be a company called Warner Communications. This is a company that not only has a fine subsidiary a Terry which produces the games but also has other things in motion pictures and so on. Selling it six times earnings I think it's undervalued. Video Recorders this is an entirely new area about a year old. As far as the residential home market is concerned the leader

here in taping TV shows and showing them again set is Sony with its better Macs for an operation. But I much prefer the much use system which RCA will market very shortly and it's a good way to play the system. And RCA may be a good turnaround candidate but of Randal's speaking of the political campaign oratory has a highly appropriate question about pollution control often called the Wood of Rockford Illinois is looking for good investments in that area either now or after the election. You clearly have form yes so I think investors in blue should control long term and even short term might be very beneficial. It is a growth industry here to stay. Companies like Browning for Peabody international others waste management could be very interesting. They have done well. They're not showing low prices but I think they're good investments.

Other pression viewers asked about investing in robotics in 1978 and cholesterol reducing drugs in 1984. Keep those cards and letters coming in folks. One viewer was thinking globally back in 1980 when capital a bit first horn of Huntsville Alabama says he's heard that some of the world's best investments today including mutual funds stock savings accounts from Tennessee can be found in the Far East Japan Singapore Hong Kong and elsewhere. Just how safe is this area of the globe for investment. Yes what is your advice. OK she's right the Western Pacific countries are going to be the wave of investment success in 1080 is there's a lot of a lot of possibility out there. It goes from Japan down through Malaysia in the Philippines and last but not least Australia. There is a better way to do it. Less risk that is a by mutual fund. There is a mutual fund that concentrates in the western Pacific companies and that's called Merrill Lynch Pacific fund.

Marilyn specific has been the second best performing mutual fund since the date of that program. And whose fund has been the best in 1982 a shiny New Englander hardly known outside the investment business made his television debut on this program and the rest is history. Peter Lynch is smart hardworking and humble. A rare enough combination in any business. And he believes the small investor may actually sometimes have the best information but fail to use it. Obviously the typical investor as an individual doesn't have the time to spend all the time you spend on all this. But is there anything he or she can learn from what you do. BI I'm amazed that the average investor is out there in some industry or in the polyvinyl chloride industry their insurance their in textiles and they're going to see those industries turn. And they're not going to buy those stocks they're going to go buy some stock from somebody in the National Guard are they going to something on television and biogenetic so they have a big edge in me I work awfully hard and they're months ahead of me. They can be the Health Committee they're seeing new products they should work on that on that that they have in front of them

as they used to tell writers write what you know you tell them but I would you know what would you tell them not to do what you do in this day is a common stake I do I think people buy stocks because they've fallen from the two thirds of EPS or half of X on that basis alone. You're buying a stock that's called bottom fishing the stock market very very difficult I've had a rough go with stand here fell from 90 to 60 and I told everybody the stock is not going to go any lower. Then I went to 50 and I said this is it no lower. As it went through 40 I said to people this is it. Finally when it got down under 30 and people said what you think is Ohio I said What the what does Ohio do. I don't I don't know that. You know I actually backed away from it in my to buy low last spring Peter Lynch retired from running the Fidelity Magellan Fund. But to our joy he still comes back to visit us over the years we've had some wonderful predictions from panelists and guests. But as I often point out

nobody in this business bats a thousand. And we've had some prognostications that are best forgotten. You have used phrases rather more severe than the economy turning down your suggestion that we may have the worst depression in our history. Yes I have said that we probably would have a worse depression than the twenty and thirty three depression. But even then it isn't an apocalypse you know I lived through it. You didn't. So I know what it was like. I caught the end of it at the back of your book says. That you predict a major economic downturn probably starting this year with a 70 percent chance it will become a full scale inflationary depression. You now feel that our current episode will not become a full scale depression. Not this current one. Not what I thought. And the book indicated that the other 30 percent probability was we'd have a recovery from this one one more time then we'd move into that inflationary depression. Right now I'd say it's 60 40 that we're going to find ourselves in a

recession from which we will have an inflationary recovery but I think the real inflation is going to take up sometime toward the end of 1901 which will lead us into an inflationary depression. Do you think we're really going to have a gold standard very soon it's inevitable. What's the first. Well very soon means. Before Reagan's first term is up and the movement to it I believe will begin before next spring. And how could we talk about the sublime and ridiculous without talking about our old friend Joe Granville Joseph Granville was the hottest news letter writer in the business in the late 70s and early 80s when Joe paid his first visit to Owings Mills. He was confident as ever. When we announced we were going to have you on the program this week we got a lot of mail from readers of your newsletter. Not all of whom were in France. Let me just quote from one of what I'm quoting here January 16th letter in which you called for a bullish break out of the market that day incidentally was higher than it is right now. And you also said and I quote this I have absolutely no doubt as to my ability to be

right on the market. I cannot foresee ever making a serious mistake again in the market. Well you made a mistake. It was a series of well how better than to be all right. I'll bet you right now Lou if that letter came from an optimal player because they're the greatest warriors there are and I write a market letter not an option letter and we get people going about it a lot of times we got people going in November less than two years later. Granville was back. I only have one Judge Lewis and it's called the market. In other words when we go under 900 The verdict for Joe Graham who will be not going to have one theory Lewis again is to put you in the bottom and take you out of the dump. Granville missed most of the beginning of the bull market in the early 80s but in 1984 with the Dow at twelve twenty he was back. Now nobody knows THE DAY nor THE HOUR. Certainly I don't. But I do know that it is very very late. Right now I've been doing research for the last year and a half. A growing number of what I called

one thousand twenty nine parallels. Both the time you mention the that year people's eyebrows go up and say oh that's never going to happen again. As a matter of fact a. Front page story in The Wall Street Journal on October 12 this year just last month was that all our top economists and Nobel laureates and so forth see no depression come let me stop you right there. You're the same program. Who told us in 1982 that you didn't want to mix in fundamental analysis with that analysis. You're the guy who said what does the economy have to have a stock market or nothing. What do interest rates have to do with the stock market. Nothing. Now when you've been wrong about the market for two years suddenly you're back to fundamental analysis. Louis we would be frightfully dull if we weren't so subject to change and flexibility. And Joe has certainly changed. You know you're out of time we have need one sentence from your with the most important lesson you've learned in the last three years. Humility. And I have the evidence of it is so overwhelming that I can say the lesson has been well.

Thanks a million Joe Granville it's always a joy to see you. And we'll check up on you again in your next incarnation whatever that may be. Say this for Joe he never gives up and is still publishing his market letter. There have been a couple of incidents around here that show in case anyone was in doubt that even I don't bet a thousand. Take the February night back in 1987 when I composed a series of Valentines Day odes and then tripped over my own poesie. And finally let's really get out the perfume and lace for the most adorable creature of 1987. The stock market only Shakespeare I feel will do. So let's try. How do I love thee. Let me count the ways. Nineteen hundred two thousand twenty one hundred twenty 200. Keep it up baby. You're beautiful. The following Friday I admitted that I had gone down swinging. Okay first things first let's stop all those great poets and shocked

English teachers from spinning in their graves. But this was the week when I finally found out what you people out there really care about. And as a result tonight I have to make my first public correction in 17 years of Wall Street Week as hundreds upon hundreds of literate viewers have triumphantly nay gleefully pointed out I was less than entirely accurate last week when in the course of offering some Valentine verses of my own I suggested that the sonnet including the words how do I love thee let me count the ways was by Shakespeare. From every corner of this noble land by post by phone by telegraph viewers rush to shout shame. And at last many to be sure tried to become mind as they happily stabbed at my high school report card as Mary Sutton Gilchrist of Syracuse New York affectionately put it. How do we love you. More ways than are countable. Your talent with

verses is just insurmountable. But one year last I had met left me frowning. That wasn't Shakespeare it was a beret Brownie. Others not so generous fired at me with furs that was not so much black as point blank. Wrote Joseph Cotton of Palo Alto California. Roses are red violets are blue Louis Rukeyser made a booboo proving that I can occasionally be as imperfect in geography as I was in English. I once welcomed a guest from Atlanta as follows. Don welcome delighted to have you north of the Mason-Dixon line. As any high school geography student knows and as many viewers gleefully pointed out Maryland is south of the Mason-Dixon line. Maybe I was thinking of Wall Street. Sometimes guests have had a hard time finding their way to Owings Mills Maryland which for the curious is a suburb northwest of Baltimore. One guest didn't make it until the

program was well underway. I had hoped at this point to go and find out from Harry Brown. Yeah we had. I was afraid that was going to happen in four years ago when they see all we do is going to happen some night. He's not here. We thought he's going to comment during the show he took that he missed one plane and his later plane apparently they're getting from the airport to here is delayed in traffic. I hope he's going to show up before we were off the air. Meanwhile on the take these buzzards over I'm going to talk about his book anyhow and hope he comes in to defend himself. Welcome to life. And I'd have you have I got you very likely. I'm happy to report that on future visits Harry Brown arrived in plenty of time and so far in the 16 years since that incident we've never had a late guest. We like I guess to offer some investment suggestions to viewers but one 1980 guest went too far. Asked for his best recommendations. He picked up a piece of paper and rattled off no fewer than sixty six names

are going to list the number of nations number one on my list. If you don't mind me looking it it's just. I do it again in alphabetical order. I like very much Alaska interest it's American Airlines and I going to largest American Express Apache CSX Corporation. Kodak Firestone Fisher Porter flexi van Franklin Mint front your allies on some to National Semiconductor. The Thomas oak industries talked to John Warner co Westinghouse Zapata 0 0 needs and Zimmer homes and some of those companies are still in business. One notably outspoken guest in our early years was Economist Pierre Renfro

who has just been an unsuccessful candidate for governor of New York. He would want to face the facts of life. If you look at the testimony on the pipeline from Alaska so that we can get the oil in the United States the main consideration they had was whether or not the caribou could jump over the pipeline and we had a big argument about we're going to talk Ted I'm dead serious. You're going to melt the perma thoughts of whether or not you would Bill Bradley have the Karabakh over the pipeline I'm a very fine guy I am not particularly interested in the caribou going over the pipeline I'm we're concerned about you. But look you have to want to 12 million people make their economy go. Two weeks later to show our impartiality in such matters we went to Washington's National Zoo to see if we could find a caribou willing to come on the program and discuss Pierre rent free. We couldn't but three years later Mario Cuomo was favorite Republican returned to pull his punches once again. I think you've got to start off with the basic concept that what we've got. What the country has offered economically is what. What I would call the do everything which other

Democrats and the do nothings who are the Republicans. You've got one group who have all heart and no intellect. And that's the Democrats and then you have the Republicans who are all intellect and no heart. In 1989 we had a memorable program on the future of television on the 50th anniversary of its birth. Former NBC President Pat Weaver and legendary producer Grant Tinker spoke about how television has changed. You influence the First 50 Years of American television as much as any man. What do you think of the state of the product today. Well I've complained a number of times about the weathering of the promise. Because we really did have a tremendous thing going in the 50s after. The a bunch of us who had run the real radio business program business went over and. Took over the facilities network that the radio people had been and made it into a program service with a

grand design that we really believed was going to revolutionize society. And it worked so well in the eight years that followed that they kept the formula but they turned. On the cameras not the real world that we were trying to cover in many different ways including intended but also too much in the movie studio product. A friend of mine who was has been a longtime television executive maintains that commercial television has to operate under what he calls Gresham's Law bad programming drives out good programming. Most people want to watch trash do you agree with that. Well to some extent I do. And I also agree with Pat that we have sort of abdicated what could have been our television and given too much of it over to what he called the studios I think of it as too much fiction and too little fact. And I think he and I should be comforted by by the future in that regard. I don't really understand the hardware of television and

I certainly can't look ahead to what it will become but it's obvious that television is is now so pervasive can go anywhere bring back anything that I think will now to redress the balance to have less fiction and more facts and that will be bringing the world in effect into everyone's living rooms and to that extent we will be driving out perhaps some of the witless and forgettable fiction. We have twenty six panelists on this program. Two of them Frank Caprio and Carter Randall were on the very first program called whom was in the original to Bill waters and Julius Westheimer joined in our second year. But the others have all been guests first and that's how our new panelists are chosen. We thought it would be fun to take a look at some of their memorable debuts. Actually investor expectations are simply the study of what investors expect the market to do and you may ask why is that important. Well I'll try to give you a brief example.

It doesn't really make any difference what causes investors to think bullishly a bearish at least from my standpoint I only care that they are bullish or that they are bearish. Nothing is 100 percent sure but with technical analysis you can see trends. You can see basically where there is support a resistance for price and volume characteristics and and. Once a trend is in motion it will stay in that that until you're in that trend until there's a bigger force. First of all of us I don't believe that any analyst should identify too much with any one theory I don't know of any person who has really succeeded for a long time in this business who is locked into one one specialty only. But I am a customer to another General Motors bellwether partially because these years of steady ins make more than brokers. I expect that both newspapers and television will probably continue to maintain or slightly increase their market share is at the expense of other media primarily magazines in direct mail.

Well I think the most significant things that are happening actually below the surface in the sense that the words that are used the buzz words of inflation interest rates money and things of that sort. I think what really the market is attempting to do following is a great deal of concern with significant underlying fundamental change that has occurred in the U.S. a technical analyst studies of supply and demand factors in the stock market. And we do that by studying price fluctuations and the corresponding volume patterns. Now that's the work that we do on individual stocks. In studying the market itself yes we do again study the fluctuations as Birgitte registered by the various indices. But we also delve into what business cycle indicators affecting our correlate well with the market. What monetary factors affect the market. Well our short definition is that a stock is a company that's capable of producing earnings growth and dividend

growth and the general growth of the overall economy. Over the last five years as a as a matter of fact road stops big grow what I try to do is find companies that fall into what I guess what you call the in effect in the inefficient sector of the market. So much of Wall Street's research is done on an industry basis that very frequently there are companies that probably train between the cracks of industries so aren't covered and therefore may be unrecognized. I don't understand all of the methodology of most market timers so I guess I can't really respond to their approach. I guess my concern is that when I would put all of the market timers together for example if we were to go out and tally up all those people who are trying to make some sort of a market timing approach and contrast their performance to those people who are so-called stock pickers or bottom up managers they have an outperform the market either for most periods of time.

I think a wonderful piece of investment advice today offered with all due humility is to get out of debt. What the world seems to want to sell you is a second mortgage. That is the latest vogue among the dead peddlers nice. It seems a wonderful thing not to take on with 20 years to our credit. It's nice to see that we've been accepted as part of American culture. We long ago lost count of the number of sitcoms that have mentioned us in their scripts. But we do recall that memorable nine minute parody on Saturday Night Live Stream. We used to. Possible by grants from. The boa horn investement. Ad ball Horn your future's in the bag. And high risk securities. When you're investing the money you don't absolutely need. And the diversified group your money's safe with us unless the whole thing collapses. Produced Friday October 23rd. Our panelists our toniest upon it ch Collin Hutchinson Jane Wakan and Stephen Badcock our

special guest is future man. Good evening I'm Liz rock guys. There is a striking resemblance isn't there. Even if he did have a little trouble pronouncing the name Kaiser Not to worry I was 11 before I had the hang of it myself. One of the enjoyable things about doing this program for two decades is that it affords us a chance to look back. Earlier this year we established the Wall Street Week With Louis Rukeyser a Hall of Fame to enshrine guests who have been special favorites of our viewers for men were clearly the audience's first choices. Two of them John Templeton and Peter Lynch were guests on last week's 20th anniversary program. Two of them couldn't be. And it was our loss. Now come Forbes was a great writer raconteur and lover of life. He liked to say I so did living that no one will be sadder when I'm dug under. Welcome welcome we're just delighted to have you with us.

I want to share please. If you have. Filled out for me. Little trepidation would you be trepidation. I know you're intimidated but take it easy. You may have a career if you do well tonight. Forbes is often called the happy capitalist and one look just now we'll tell you why. In addition to his notable holdings he's the chairman he's the editor in chief as well of Forbes business magazine founded in 1979 by his father a Scottish immigrant. Now one of the largest and most respected in the field. Malcolm you were born rich you've become a heck of a lot richer. But most of the public attention as I already suggested is centered on the way you've spent all that money. Now your father they tell me it was a pretty tight Scott. How do you feel about all this publicity. Well I've I'm sure I wouldn't mind the publicity yes the price that was it was in expenditures without the household atmosphere. You know he was his thing. He was stingy and non-essential extended tours of what she considered over

generous allowances in that category. I remember whenever we left the living room going to dinner we were all taught to turn out the lights on the way into the dining room. He wasn't stingy he just had a great respect for money. And I've developed a great affection for him. What is your attitude toward money. That it's a very nice thing to have. By far our viewers favorite guest and mine too if the truth be known was a fellow named Merrill Stanley Rukeyser. We waited until 1984 before giving him his first shot. By which time I figured that the viewers could trust me not just to be showing you home movies. And that it really wasn't fair to keep a qualified guest off just because he happened to be the host father. As soon as he appeared he was wanted to know why had I been hiding him. And when would he come back. Well streets. Have never been. Popular.

And it's an easy thing for the demagogues and I think that those who speak about this in the fairness of an incumbent president in the tax bill. And not only attacking the incumbent whether attacking the whole system because the nature of the competitive system is in the quality we pay people according to their productivity. If you want to pay pay people equally then I recommend communism. They promise that they don't always perform well at 87 you belong to one of the constituencies that was singled out for special attention this week. How do you feel about being described as a senior citizen. I resent that. I'm against hyphenated Americans whether that German Americans a Jewish Americans or even Americans or gay Americans are sober American and you think the deficit isn't the big story of this past year and the economy was all the corporate mergers as we have had this before. We've had mergers before but I think some aspects

of it that need a little straightening out. I think it's a conflict of interest when management puts itself in conflict with the stockholders and makes a leveraged buyout that they've been hired to work for the stockholders not to trade against them. You were quoted earlier this year in one magazine with some that still sounds pretty good to me. You talk about constant she said There's no surer investment no chance of being right every time all you have to work with is careful selection. Persistence supervision and diversification to cushion your mistakes. Successful investors know themselves and do their own thinking. They don't react to each market fluctuation they find a good investment and let it pay off. What you want to amend out of all now know it was pretty clever of me I didn't remember this thing. You still hold of common stocks. I am but with the. Advice and Consent of my AS and as signs I took advantage of my age and bought a non

refund annuity so I could afford the whole whole common stuff that only paid a small rate on the purchase of market value. But when you are investing for your own account you still believe in the future of the stock market. Yes and I believe that I was assuming certain risks. I didn't think I was making a risk of this adventure. You're obviously not a newsletter writer because they don't have any risk latest tell us they know the answer well if you subscribe for about 60 or 80 dollars a year. You're going to have this risk was eventually the only thing is that they run out of town after a big break. Your life covers a whole cycle in American life in terms of our international position. We were a debtor nation we became a creditor nation now are a debtor nation again how can we become more competitive in America. But a return to excellence. Will Stanley Rukeyser lived his life striving for excellence and though he's no longer here that goal remains an inspiration for us all.

Twenty years ago when there was no other program about money on American television the prevailing view was that the subject of finance and economics was simply too dull and or too complicated to attract an audience larger than the capacity of your average telephone booth. The old telephone bills have virtually disappeared since then but we're still here. Thanks for helping us these past two decades to put a little money in your life and vice versa with any luck we'll keep on having fun and helping you make sense of the world of money for a long time to come. Meanwhile this is been the first 20 years of Wall Street Week. I'm Louis Rukeyser. For your Friday 20 years of Wall Street Week With Louis Rukeyser has been made possible by the travelers insurance and related financial services working to provide financial peace of mind for American business by Enron providing natural gas which holds the promise for a cleaner world and a more

energy independent America. And Ron core and the Enron Foundation and by Prudential based securities rock solid market wise for a printed transcript of this program send a $5 to transcripts 20 years of Wall Street Week With Louis Rukeyser Owings Mills Maryland 2 1 1 1 7. That's $5 to transcripts 20 years of Wall Street Week With Louis Rukeyser Owings Mills Maryland 2 1 1 1 7. 0. 0 0. Twenty years of Wall Street Week With Louis Rukeyser has been produced by Maryland Public

Television which is soley responsible for its content. This is PBS.