Da Bulls vs. Da Bears

Investing is about making good decisions. With thousands of stocks, mutual funds, and other sophisticated investments to choose from, there's an infinite number of ways that you can balance a portfolio.

Of course, choosing the very best combination of the best stocks -- given your investment objectives and constraints -- requires an enormous amount of critical thinking. And what's the secret to critical thinking?

Having an open mind.

Two sides to every coin
Here at the Fool, we advocate listening carefully to both sides of any stock story -- the bull and the bear case -- so that investors have a chance to make informed and objective investment decisions. It's that kind of philosophy that inspired the creation of our Dueling Fools column and award-winning discussion boards; it also gives our analysts the freedom to disagree (sometimes vehemently!) with one another.

With that in mind, I'm going to highlight two closely contested "investment battles" taking place over in our Motley Fool CAPS community. Unlike stocks such as Nike (NYSE:NKE), which is bullishly overweighted, the stocks I highlight here have a fairly even number of CAPS supporters and detractors.

Ready to rumble?
By watching both sides go at each other, maybe we can glean a few insights into these stocks. And if not, hey, at least we'll get to witness a good old-fashioned bullfight. Ole!

So, without further ado, this week's two stock skirmishes involve:

Naturally, these stocks should be thoroughly researched before you make any kind of decision on them -- whether buy, sell, short, or waffle. Besides, with stocks this hotly debated, investors should proceed with extra caution.

But just for starters, here's a quick glimpse of some of the toe-to-toe action regarding these stocks, with a little color commentary from yours truly.

Bear attack on RadioShack
The new year couldn't have come any sooner for electronics retailer RadioShack. After continued operating weakness in 2006, marked by the well-documented resignation of CEO David Edmondson, the company hopes to finally turn the corner in 2007. Of course, the fight in our CAPS community is over whether RadioShack, once a favored electronics store of shoppers and a darling stock on Wall Street, still has the ability to perform well today.

CAPS All-Star and RadioShack bear RagingAlpaca starts off the bout by delivering a lightning-fast flurry of arguments aimed at hurting RadioShack where it hurts most -- its lack of competitive advantage:

"Sadly, as a younger consumer, I wouldn't even THINK to go to Radio Shack to buy any type of electronics. I don't see how they can possibly compete with bigger, more modern-feeling stores like Best Buy and Circuit City. The steady decline in revenues and decreasing cash on hand seems to bear this out. It's simply a product of a bygone era."

Yet despite the awesome barrage of bearish assaults, one RadioShack supporter is displaying a rock-hard chin and a heart of a champion (or at least of a raging bull). CAPS fighter stmboyd is dazed but certainly not confused as he manages to get off a power-packed counterpunch, highlighting RadioShack's strategic initiatives and the reputation of its new leader, Julian Day:

"CEO Julian Day is a turnaround master (Kmart/Sears from $15 to $175+ in 3 years and climbing). Did you catch the new Rolling Stones '06 tour? ... brought to you by RadioShack. Gone are the nerdy gadgets. Enter, hot new consumer electronics. Note RS's name at the tail of many newly marketed electronics' ads on TV."

After this round, the RadioShack scorecard shows a nearly dead-even match: 62 bulls and 61 bears. It's still anyone's ferocious stock fight, so be sure to stay tuned.

Will bears blow a house down?
The real estate market -- and more specifically, homebuilders -- is the subject of much debate in our CAPS community. Centex, one of the nation's leading builders, is no exception. The debate over Centex revolves around whether the company's impressive organic growth can continue in the face of a slowing real estate market, coupled with an enormous amount of land on its books.

CAPS All-Star weiwentg starts the round quickly with an intimidating bull-charge designed to take advantage of Centex's strong historical performance and a focus on housing that takes the long run into consideration:

"Centex is growing fast, and it is profitable. I believe that potential investors should take a long-term view of the housing market. The current drop is temporary. Centex has huge exposure to first-time buyers and first-time mover-uppers -- these markets are expected to receive a large boost from immigrants and children of baby boomers."

However, another CAPS All-Star, sleepyseth, shows some impressive agility for a big old Centex bear and leaps out of the charging bull's way. With his teeth, paws, and claws intact, this Centex supporter comes back with a fierce array of bearish sentiment that stresses the negative short-term consequences of a real estate downturn on the valuation of its shares:

"CTX is heading further down with the rest of the real estate market. We saw an amazing amount of overbuilding and overspeculation. ... This has only begun to get worse. These companies' P/E ratios won't look so cheap on contracting earnings."

A quick look at the scorecard shows that the bears have a slight advantage in the battle for Centex sentiment: 52 bulls and 58 bears. This exciting match is still up in the air, so try not to look away for too long.

But what's your opinion, Fool?
There you have it, Fools. Whom do you tend to agree with? The bulls? The bears? Lions and tigers?

There's no doubt that the competition regarding these two stocks will only get more intense over time and probably needs an investor like you to finally tip the scales in one direction. If you're licking your chops to get in on the action, join the CAPS community -- it's absolutely free.

See you next week, Fools. Have a blast in the CAPS ring, but just remember to keep your gloves up at all times!

Best Buy is a Motley Fool Stock Advisor recommendation. See what other stocks Tom and David Gardner are recommending by checking out Stock Advisor free for 30 days.

Fool contributor Brian Pacampara is afraid of bulls, bears, and little kittens. He doesn't hold a position in any of the companies mentioned. The Fool's disclosure policy always comes out on top.