ALEXANDRIA, VA (Dec. 2, 1999) -- The stock market has been volatile enough to make both bulls and bears correct.
Where does a Fool stand in all of this volatility? Is it time to choose a new side of the playing field? Should we cross from the bull camp (a bull being a person who expects the market to rise), and join the bear camp, pitching a tent with those who expect the market to fall?
Let's examine the question of "bulls" and "bears" itself.
At social gatherings, on planes, trains and in automobiles, and even at Great Aunt Mildred's house, the question is often asked, "So, are you a bull or a bear on the stock market?"
I don't know how you respond, but I often fall into a longer than usual silence that is perceived as stupidity, while I stare emptily (in this example, at Mildred) and search for the right words. In the past, those words have been, "I'm a long-term bull." After saying that, Mildred always stares back at me, thinking, and then slowly begins to nod, until finally she opens her mouth and says... "Yes, but where do you think the stock market will go in the meantime?"
At this point I usually resort to falling into a contrived fit of coughing, clutching my stomach and stumbling from the room, staying away long enough for the topic of conversation to have moved to daffodils before I return. This (somewhat) gracefully lets me off the hook.
The problem still remains, though: How do you answer the universal question, the one asked literally millions of times across this country every single year, the "Are you a bull or a bear?" question.
Well, the next time that I'm asked this question I'll try a new answer that I believe will suffice no matter where I am. I have an answer whether I'm at Great Aunt Mildred's house, or whether I'm sitting next to a strange man in an airplane who is always talking to himself, saying, "This is your Captain, nobody be alarmed, but there's a man in the cockpit." (I never understand that, nor the handcuffs that're slapped on me upon landing.)
So let's try it. In fact, let's try this together.
Here's the set-up. We're at a cocktail party in Washington, D.C., where the conversation is rarely about politics (we're too close to the source here, so we tire of it), but is frequently about the stock market. We stroll into a small group of people at the party and one man asks, "So, are you a bull or a bear on the market?" The Foolish answer that we now try is, "Neither. I'm an investor."
We receive strange stares in response, so we continue, "We don't pretend to know where the market is going, so we're neither a bull nor a bear. We simply invest in leading companies that have promising futures [including the S&P 500]. This works for us. We're investors. "
Let's consider the reasoning behind this new response.
You can't be a bear or a bull -- even a long-term bull -- without purporting to, on some level, know where the stock market is going. Despite history, however, there is no guarantee that the market will be higher in fifteen years. It's likely, but it's not guaranteed. By calling yourself a long-term bull, though, you're saying that you think the market is going higher, and even though it is a long-term call, it's still just the slightest bit Wise.
I actually have no idea where the market will go, and I don't pretend to know. I'm an investor. That doesn't mean I'm a bull or a bear. It means that I'm investing in companies that I understand -- companies that have a strong chance of continuing to grow over the decades, no matter what the stock market does. I don't need to be a bull or bear on the market. I don't need to use those Wise terms.
Be an investor. Not a bull or bear.
It's such a silly game anyway. The Wise in the media are constantly claiming to be a "bull, bear, or neutral" -- and hey, whatever! Who cares what they are? They don't own my companies, or if they do, they're not talking about them anyway.
Just think: Are you a bull or a bear on the issue of the sun rising tomorrow? If you answer yes to either, you're wrong on both. The sun doesn't rise, the earth spins. Investing is the same way, and so is life -- it doesn't go up and down, it runs constant. Invest in that fact. Don't invest looking for ups and downs and call yourself a bull or a bear. Instead, invest in the lifelong "constant" that's best represented by great companies, and call yourself an investor.