Confessions Of a Born Skeptic on His 'Bearish DNA'

When it was "happy days are here again" in the stock market earlier this week, there were times I thought: If only I didn't have this bearish DNA.

It can really get a guy down.

Neighbors, attorneys representing companies that have been written about here in a not-so-flattering way, wouldn't shun me. I would see cloudy skies as partly sunny. The San Diego Union-Tribune, in a recent story about me, wouldn't have used the headline "Scorned Scribe."

"We coulda been lemmings, going along for the ride," half-jokes Doug Kass, who runs Seabreeze Partners and is best known for his bearish calls. (I mean, this guy is so much a bear by nature that early in his career he worked for Ralph Nader.)

"Why?" Kass asks. "Why? Why?"

Then reality hit as I started discussing this with Bill Fleckenstien, of Fleckenstein Capital, who in recent years has been known more for his bearish calls, even though he was among the early bulls on Advanced Micro Devices (AMD).

I ask Bill, "Wish you were bullish?"

"You mean gullible," he says. "We are bullish when it makes sense, risk/reward-wise."

He has something there, because, as regular readers of this column know, I have my share of "bullish" stories. The DNA in question is more about thinking critically and skeptically, not being bearish, unless provoked by fundamentals, ridiculous valuation or something nefarious.

Then why, wrote one reader of, where I first penned these thoughts Tuesday, does the bear case always sound smarter?

It sounds smarter because, generally, it is. It's just often premature, which can make it look dumber.

It's never easy questioning conventional wisdom, but when you're born this way you can't change.

So, for example, when I see so many profit reports looking so strong, my first inclination is to query the quality of those earnings. And when I see so many stocks rising because the earnings "beat" numbers, I automatically wonder how much of that guidance was lowballed or why should we care about beating, which by nature is a game and has nothing to do with investing.

The DNA that makes me think that way is as much a part of me as my fingerprints.

"How would life be if you had bullish DNA?" I put that question to Jim Chanos, of Kynikos Associates, whose short-selling fund is widely regarded as the country's largest.

"Easier," he says.

Not to mention duller.

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