I get into a lot of fights with my Foolish brethren. It's who I am. I'm a dueling Fool.
Each Thursday, our chief combatant, Rick Munarriz, pits Fool vs. Fool in a contest to decide whether a stock is fit for your portfolio. One bull. One bear. Two arguments. You decide.
Dueling has been a tradition since the early days of The Motley Fool, dating back a full decade. Unfortunately, the site archives began tracking the feature only in July of 1997. Here's the first of that series, a brouhaha over Intel (Nasdaq: INTC ) .
The form of that tussle isn't all that different from what you'll find here today. I'm battling it out with fellow Fool Rich Smith over the investing case for TiVo. (Rich is wrong, by the way. Just so you know.)
Growl and snort
For some, such a debate makes no sense. They exclaim: "Didn't you guys already choose this one for Motley Fool Stock Advisor?" Well, yes, David Gardner did recommend this one for Stock Advisor. But the Fool isn't a single source of opinion. Instead, it's a motley array of opinions and analysis. It's the variety, we believe, that helps to educate, amuse, and enrich our subscribers. And what's more, dueling makes us all better investors. Rick says it best:
We don't want to change your mind. We only want to expand it. I think that once folks see a rational counterargument presented, a light bulb goes off. It may not change their mind, but it will help them not only respect opposing opinion but seek it out in every investment that they own -- or hope to eventually own.
I'll go even further: The richest investors know why they shouldn't own the stocks they own.
My life as a bear
Let me explain by way of example. A few months back, I dueled fellow Fool Chuck Saletta over Buffalo Wild Wings (Nasdaq: BWLD ) , a stock I own. But I took the bear argument. I was concerned at the time. Comparable-store sales were dropping, cash from operations was down more than 30%, and the stock was stuck at a price below where I had bought it. Embracing the bear argument helped me rethink the risks to my portfolio. I judged them to be far less than the opportunity for outsized returns, and so I held. The stock is up more than 35% since. Thanks, Chuck.
Since we resuscitated this feature last June, we have posted more than 30 duels. Some of my favorites include a brawl with W.D. Crotty over Marvel Entertainment, a throw-down between Rich Smith and Stephen Simpson over Merck, and an argument between Jeff Hwang and John Reeves over Overstock.com.
Duel with your portfolio
How can any of this help you, the Foolish investor? Simple: Become a duelist. Sharpen your rapier and attack your portfolio with the same spirit that we Foolish writers attack each other's opinions. All you need do is ask questions.
For example, if you're bullish on Baidu.com (Nasdaq: BIDU ) , contemplate the following as you begin your research:
- What could keep Baidu from meeting my expectations for profits and cash flow?
- Have any of those risks begun to appear?
- If not, what are the chances they will?
Feeling bearish? The same three questions apply. (By the way, we dueled over Baidu, too. Take a look at what Rick and Charly Travers had to say.)
Fighting to get rich
Remember: There are both bulls and bears for every single one of the 9,000-plus stocks that make up the stock market. They duel daily, and we investors receive the benefits through fluctuating prices that, we hope, will allow us to buy low and sell high.
This truism is so important to David and Tom Gardner that they made Dueling Fools a part of Stock Advisor from day one. Each challenges the other's investing thesis with sharp, Foolish questions in the spirit of both competition and better investing. It's worked well thus far. The brothers are walloping the market by more than 25% each as I write. (By the way, if that sounds enticing, you can test-driveStock Advisor free for 30 days.)
The Foolish bottom line
Riding the wave of popular opinion won't make you rich when it comes to stocks. Instead, you have to be willing to hold or -- gulp -- buy more when think you're right, often in the face of withering criticism. We know that's not easy, but you can do it. There's courage, and profit, to be had in understanding the critics. Don't let ignorance get in the way of your returns. Become a duelist instead.
Buffalo Wild Wings is a Motley Fool Hidden Gems recommendation. Merck is a Motley Fool Income Investor pick.
Fool contributor Tim Beyers loves being called a complete Fool. He invites you to join the fun. Tim owns shares of Buffalo Wild Wings. You can find out what is in his portfolio by checking his Fool profile. The Motley Fool has an ironclad disclosure policy.