FOOL ON THE HILL
Investors Persevere

Believing in the market lately has been a lot like playing Sisyphus. You labor harder and higher, only to watch your work go for naught when stock prices come tumbling back down. But there's pride in mythology. Sisyphus only sounds venereal. Rick Munarriz explains why.

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By Rick Aristotle Munarriz (TMF Edible)
January 10, 2003

Is there anyone sorrier than Sisyphus? You know, that poor mythological chap who was condemned to pushing a boulder up a hill, only to watch it come rolling back down and start the process all over again?

As investors, the sandals of Sisyphus are starting to feel like a cozy fit after these last three years of bearish drubbing. Sure, the last few months of watching the market muscle its way uphill has been rewarding, but would anyone be surprised if we found our calloused hands back where we started sooner rather than later?

We had two of these fakes last year -- one early in the spring and another late-summer surge, and each proved to be short-lived before the latest three-month spurt of gains had the media raising its collective brow. Some call them trading rallies. The pretty folks at CNBC tag them as bull runs in a secular bear market. You might have other terms for it. Anything beyond "fiscal hemorrhoids" is probably unprintable.

So here's to you, Sisyphus, futile laborer of the underworld. You rock! I mean, after Enron, the dot-com bubble, and Harvey Pitt, you're still toiling away in the stock market. You don't give up. You can laugh it off, claiming life has its ups and downs, but you bear no shame performing in front of naysaying gawkers.

But tradition is on your side. Historical returns don't lie. And just as the bears should have been heeded after years of scoffing at share prices outpacing earnings growth, the bulls should be heeded after being lapped for three years.

For the bears in the studio audience, save the trouble of writing to let me know I'm oversimplifying things. I know. I'm not trying to go Walden on you. My point is more about the perseverance of the investor than the nuances of market timing. Sisyphus is putting in quite the workout while the bull's away, that's for sure.

No one's saying that we're out of the woods yet, with any degree of certainty. The scent of war lingers. Companies are still laying off and holding back on corporate spending. Krispy Kreme (NYSE: KKD) is still trading at 56 times trailing earnings.

No one's asking for stock tips at the dentist's office. The mention of "mutual funds" no longer draws a crowd at cocktail parties. Krispy Kreme is still making some tasty doughnuts though, aren't they?

Bull markets aren't catapulted off euphoria's stepladder. That's why this perfect imperfection just might be the real deal. There's money to be made when there's blood in the streets. You just need paddling lessons. The only problem is you're not paddling alone.

If you begin to factor in past trends, 2003 takes on a bullish flavor. Over the last century, stocks only fell four years in a row once (from 1929 to 1932). There's also a hot streak of stocks rising during the third year of presidential cycles. You'd have to go back to the 1940s to find a losing year under that assumption.

But beyond the foul play and the president precedent, you have the financial media smiling kindly on the 2003 prospects. That's not good. As Bill Mann pointed out last month, BusinessWeek's year-end outlook has been bullish and wrong for three years running. "Can't miss" trends were in play then, too. Problem is, they missed.

So let's say the market rises in 2003. No, let's say it's another dud year. Wait -- why hasn't anyone predicted that the major indexes will close out the year exactly where they started? No matter, this isn't about the market. It's about the market investor. What tenacity. What perseverance. What biceps.

Homer's Odyssey doesn't fully explain what Sisyphus did to warrant a life of rock and roll. But Sisyphus is described as smart, crafty, and devoted. He cheated death. Well done, mythologically speaking. 

So take a load off, Sisyphus. You've been working so hard. Find the time to gather your thoughts as you reach down into the streaming creek for a refreshing burst of cool water. But what's this? Your reflection? You don't look like Sisyphus at all. If Homer were alive today, he'd reckon you were somebody else. You're not Sisyphus. You're Atlas. And that boulder you've been lugging around all this time? Let's just say the world wouldn't be the same without you.

Thank you, Atlas. Rock on.

Rick Aristotle Munarriz never studied mythology, and it probably shows. If you caught the link between Homer and Krispy Kreme, that's bonus points for you. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.