Gloomy Gus Laughing all the way to Bank

CHANNEL SURFING recently, I caught Louis Rukeyser delivering one of those metaphorical gibes (for which he is deservedly beloved) to the groin of his favored patsy, Gloomy Gus.

Gus was already having a pretty rough week. A pretty rough couple of decades, actually. He has been cursing the stock market while enthusiastically awaiting its collapse since about 1982, when the Dow industrials were trading at a tenth of their current price.

One recent afternoon, though, eager share buyers were pushing the Dow past 7,800 to another record, prompting the ever-affable "Wall Street Week" host to assert on his PBS show that night that perennial pessimists such as Gus were choking on this bull market's dust.

But if he's talking about the same Gloomy Gus I know, "choking" may not be quite accurate. Laughing all the way to the bank would be more like it. At least, that's what most of the Chicken Littles and closet Cassandras with whom I keep in touch have been doing lately - even as they have cursed, scorned and otherwise disbelieved the most amazing bull market in U.S. history.

It's not hard to understand why Rukeyser would have singled out Gus as the butt of his most cherished, if overworked, joke. By suggesting that the Gus's of the world are as pitiable as they are stupid, and by flogging them repeatedly for their supposedly rotten instincts, Rukeyser is preaching in the finest populist tradition.

The subliminal message is that investment success lies within the grasp of anyone willing to put his or her trust and everlasting faith in the bull market - exactly what Rukeyser's prime-time audience wants to hear, I am sure.

In the real world, though, it is questionable whether that trust is still deserved or whether it will long endure. We shall see. In any case, many of those who have diligently withheld it are the kind of calculating realists who deserve neither ridicule nor pity.

One of them who keeps in close touch with friends of mine is a business mogul whose name has always appeared near the top of Forbes magazine's annual list of the wealthiest Americans. In print he is everything you would expect a captain of industry to be: gregariously bullish on America an especially optimistic about the business he is in. In private, however, this titan of commerce, who has been called the shrewdest mind on Wall Street, frets about unloading his vast portfolio of stocks and real estate before the boom ends.

As far as I'm aware, he has been piling up financial sandbags since the mid-1980s, when he began to fear that the stock market and the financial system were headed for collapse. Simultaneously he began buying distressed property from the Resolution Trust Corp., laying the groundwork for profits that have swelled his already inestimable fortune into the billions.

Ironically, he was nearly ousted by fellow trustees of a nonprofit board whose huge investment portfolio he had taken pains to secure against the gathering storm. The board grew restless when the portfolio underperformed the market, though not by much. They would have sacked him without ceremony, but the Crash of '87 intervened, making him an instant hero. He remains a trustee, presumably for life.

Scratch a die-hard bear, then, and you'll often find a canny investor who knows when a deal - or the stock market - is full of hot air. And unlike Wall Street's feel-good patriots and proselytizers, such hardened skeptics never fly without a parachute.

You can be sure that when this bull market ends and takes the unwary herd with it, Gus will be there with a fistful of cash, ready to wheel and deal with the liquidators. He won't be the only bear around, either. There are a few other ursine role models who have grown fat on berries just by shaking the bushes vigorously and often. I worked with some of them in the trading pits of the Pacific Stock Exchange.

They are typically guys who never stop mouthing off about why this bull market is a hoax no matter how high it goes, or why Microsoft shares were a great short sale at a third of their current price. All they are doing, really, is employing the furtive methods of the poker player who would have his opponents think him a fool.

One of the most successful Chicken Littles I know runs a publishing house from a chateau in France. His name is Bill Bonner, and he is the founder of a Baltimore-based company called Agora. The firm specializes in marketing newsletters that say, more or less, that the sky is falling. Or is about to. Or worse.

I once asked Bonner why, in the throes of the most powerful bull market this country has ever witnessed, he has stuck with the doomsday message. His answer revealed another side of the bear that will make sense to those who long ago tuned out the likes of Rukeyser. The problem with the rosy view, he said, is that it always seemed pretty boring.

I agree. It's the way seismologists would start to sound if all they did was blather on about how the odds of "The Big One" occurring in California were too remote to worry about.