David paints a pretty gloomy scenario of folks treating bookstores like spruced-up library reading rooms, with chains like Borders (NYSE:BGP) logging more assists than Steve Nash as they pass eventual scores to Amazon.com (NASDAQ:AMZN) and Overstock.com (NASDAQ:OSTK).

In that sense, David would probably agree with the company's new emphasis on exclusive reads (that can't be bought elsewhere) and unique stationery products (that one wouldn't chance ordering online, sight unseen).

Diversification is the key to selling books and CDs these days. You see it working at Best Buy (NYSE:BBY) -- and, to a lesser extent, Hastings Entertainment (NASDAQ:HAST) -- and I trust that Borders is on the right path to find the best, relevant, most marketable product mix.

The company expects operating margins to return to earlier levels. With the stock trading only a smidgen lower than it did five years ago, David wonders if the success is already baked into the share price.

He is forgetting one important variable in his equation. Borders happens to be much larger today.

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So if Borders has 37% more stores than it did five years ago -- with each store selling more than it used to -- is Borders still worth less today than it was five years ago? Success isn't baked into the share price at all. If anything, David may be smelling only the sweet scents of the Seattle's Best coffee shops inside the Borders superstores.

And the even sweeter scents of Borders cash registers tomorrow.

You're not quite done yet! If you missed the bear's argument, it's here. If you've already read everything, cast your vote for the winner here.

Borders is an Inside Value pick. Amazon.com and Best Buy have been recommended to Stock Advisor subscribers. Plan now for the future with a 30-day free trial subscription.

Longtime Fool contributor Rick Munarriz loves reading so much that he married an English teacher. OK, so maybe she wasn't teaching English when they first met. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.