The Donald Explains Why Dow 12,000 Matters

This is a partial transcript from "Your World with Neil Cavuto," October 18, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: Well, what does Donald Trump make of Dow 12,000? His new book, co-written with Robert Kiyosaki, is called "Why We Want You to Be Rich."

Joining us now on the phone, the very rich and Donald Trump.

Donald, good to have you.

DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: Hi, Neil.

CAVUTO: What do you make of today?

TRUMP: Well, I am very happy that we are all a part of this incredible economy. It just keeps going. It's a great boost for the nation itself. You know, we're mired in a war that is a horrible war. And it's — it's just a great boost of confidence for the nation.

CAVUTO: Why is that part of the picture not more broadly reported?

TRUMP: You're talking about the economy itself?

CAVUTO: Yes.

TRUMP: Well, the media seems to want to almost kill it, because it happens to be a better story, other than folks like yourself, of course. The fact is, it’s a better story if the economy starts going down.

And you read so many negative things. I can tell you, I have been reading about the real estate industry crashing for the last five years, six years. And it continues to be very vibrant. You see it with sales. You see it with a lot of other things.

Now, it may not be quite as good as it was a year ago or a year-and-a-half ago. But, by any other standard, it is a fantastic market. So, the media loves to have a crash. And, then, they love to have a comeback. And, then, they love to have a crash again, you know, because that is newsworthy, and people buy newspapers.

CAVUTO: All right.

But, you know, you are also a good student of market history. You have been known to time your buys exquisitely. Would you buy into this market now? Or do you agree with some other experts that say, look, it's toppy; it's had its run; the Dow is up 10.5, 11 percent this year; that is a good run?

TRUMP: Well, I think I would be very cautious. And I certainly would buy into certain companies, and I wouldn't buy into other companies.

And, you know, you have to look at it.

CAVUTO: Well, what sectors? What sectors do you like?

TRUMP: But that is true — that is true in a great market or a terrible market, Neil.

CAVUTO: What sectors you like, then?

TRUMP: I like — I would rather talk about companies, probably, than sectors. I like a Federated. I think Terry Lundgren does an amazing job of running that company. I know him. He's a friend of mine. He's a great executive.

I like Jeff Immelt at General Electric. I think he's doing an amazing job. And it is starting to go up. And it has got a long way to go, because, if you look at its historical highs, it was quite a bit higher. And he's doing an amazing job. And they're doing better than ever. So, you know, there are companies that I like. And there are probably plenty of companies that I don't like. I probably shouldn't mention their names.

CAVUTO: All right. Well, I won't push that issue.

But I will push real estate, because there are a lot of folks worrying that, you know, we might have had a little bit of a pause in this downdraft, but it's only a pause, that building permits are way down, that THE sign of future activity is way down, and that we have got troubles on the horizon.

Do you agree?

TRUMP: Well, the fact that building permits are down is a good thing, because you are having less housing produced. And, therefore, it's catching up. They built a lot of housing. Now you have interest rates that are stabilized. And don't forget, interest rates, also, not as good as two years ago, but still very low, and historically very low. And oil is going down. And the only thing I hate about that is, people are stopping with all the talk of alternative energy.

You know, some people say that the oil-producing states and the oil companies are driving the oil down, because, for the first time ever, I have heard more talk about oil — you know, about alternative energy. And I love alternative energy.

But, when you start getting below 60 and 50, it doesn't work. Well, now people are stopping to talk about the alternative energy. And I hate to hear that, Neil, to be honest with you. But the fact is, fuel and oil, they're down, and they are continuing to go down. And that's a good thing for housing, and it's a good thing for real estate. The fact that they're building a lot less housing right now means that housing prices are going to go up. That's my opinion.

CAVUTO: You know, normally, Donald, the reason why I like having you on the show, is, you know, you are part of the smart-money crowd and the smart-money housing crowd, namely, the CEOs in those housing companies like Lennar and Toll. Some months before the fall, they were selling their shares. Obviously, they saw something going.

Now, you talk to a lot of those other fat cats. What is the view among the — the inside crowd about where we are now, that things are already toppy; look, the public is getting in; time for us to get out; or what?

TRUMP: I think people feel fairly strongly about where the world is, where the market is.

We are very, very concerned about North Korea. We're very concerned about nuclear, because, with nuclear, guess what? All bets are off, OK? All bets are off. And we ought to be focused on that. I think, as a nation, we ought to be focused on that, much more so than we have been. But, you know, my group of friends feels very bullish about the economy.

CAVUTO: All right, Donald Trump, good seeing you. Thank you.

TRUMP: So long.

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