Transcript: Mark Cuban, Dallas Mavericks Owner

This is a partial transcript from "Your World with Neil Cavuto," March 9, 2005, that was edited for clarity.


MARK CUBAN, DALLAS MAVERICKS OWNER: Well, you know, the best thing about the Internet is that the technology just keeps on going and getting better and better and better. We like to say, this is the worst the technology is ever going to be.


NEIL CAVUTO, HOST: Well, Mark might have been a little off with that one, but I doubt it really matters to him now. He cast out over $5 billion richer. Mark is the owner of the NBA's Dallas Mavericks. He joins us now from Dallas.

Well, Mark, you had impeccable timing. I think it was in 1999 you sold to Yahoo. It made you a billionaire many times over. No regrets about that one, huh?

CUBAN: No, not at all. And the technology was the worst it ever was. It has gotten better. It's just that the market was crazy then, and it's just as crazy now.

CAVUTO: Did you see that it was getting toppy and time for you to get out of Dodge?

CUBAN: You know, it wasn't so much about it getting toppy. To me, it was just history repeating itself. I had been following the market and technology for a long time. And in the early 1980's we had PC stocks. In the mid-80s we had software stocks. Remember Ashton-Tate and WordPerfect?

CAVUTO: That's right. But did you say that about your own company? Did you say that about your own company, Mark? Geez, there's no there there; I've got to get rid of this?

CUBAN: Well, it wasn't so much it was no there there. It was just like people were buying stocks because other people were buying stocks. And because that had happened before, I didn't want to find out the outcome, because you know, historically all these specialized trends in technology had led to 90 percent of the people being disappointed.

CAVUTO: Well, you were very smart to do what you did. But Mark, it's interesting, because you didn't give up on technology. You since then have refocused. I think you're a principal investor behind HDNet, if my memory serves me right.

CUBAN: Right.

CAVUTO: So where do you see the money to be made going forward?

CUBAN: You know, everybody says it's a stock-picker's market. Either you're a momentum player or you know what you're doing. I tend to stick to things where I have a strategic advantage or a company will have strategic opportunities for me.

You know, I own stocks in Lions Gate, because they can help HDNET, and I think they're a creative company. I own stock in Rentrak, because I think there has to be someone who can provide information to online advertisers and video on demand advertisers.

So I look for little niches where I can go in, study the company, study the market, but you know, for most typical investors, you've got to do your homework. Just buying stocks because other people are buying the stock, is a recipe for disaster.

CAVUTO: But at the time people thought technology was the future. And I remember people said you don't invest on earnings, you invest on promise. Remember they were saying, it wasn't price earnings, it was price promise.

And for example, you in looking at high definition TV and all of that, so far, the money is yet to be made big-time in this new technology. A lot of people are losing money hand over fist. What makes you so sure this isn't the latest bubble?

CUBAN: Well, there's a difference between buying a stock and starting a company. In my case, I saw a unique opportunity. And I jumped in, using my money and my partner, Todd Wagner, we put up our own cash.

CAVUTO: Good point.

CUBAN: For the good deals you don't bring in outside cash. You only put in your own money.

So that versus buying stock in a company that you just hope the stock goes up, that's not an investment. You might as well go to Las Vegas. And that's the big difference. You've got to be able to invest in companies, know that they're going to grow, know that the technology there really does something and has an upside in that market. And if it doesn't, avoid it.

CAVUTO: What do you think of the market now?

CUBAN: I think it's crazy.

CAVUTO: Even now?

CUBAN: Even now, yes. One of the things I learned in the NBA, Neil, is the No. 1 job of the general manager isn't to win championships. It's to keep their job.

And that's completely analogous to the fund managers right now. Fund managers, from the largest to the smallest fund, they're just trying to keep their jobs. They're trying to beat their benchmarks. And they're taking chances that are huge risks with people's money.

You know, unless you have a particular advantage in the stock, put your money in an index fund or in an ETF and just let it ride with the market. You know, you just look at these companies. Look at the volumes of these companies. Even the highest market cap companies, they turn over their entire outstanding shares once a month.

CAVUTO: Good point.

CUBAN: That's not investing. That's frightening.

CAVUTO: Mark Cuban. Thank you, sir. Good seeing you again.

CUBAN: Always, Neil.

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