How to write a bull case and a bear case for a stock

October 17, 2026 · 6 min read

A bull case is the strongest honest argument that a company will do better than the market expects. A bear case is the strongest honest argument that it will do worse. Writing both before you decide is one of the simplest guards against falling for a good story. Below is a one-page template, a worked example and a short checklist for judging which side holds up.

The short version

Bear case firstWrite it while you are still open to it.
Then the bull caseSame evidence, three drivers, and it has to answer the bear.
What would prove each wrongA specific sign, and when you would see it.
Your thesisWhich side the evidence favors, and what you will watch.

What a bull case and a bear case are

Both are arguments about the same company, built from the same evidence. What differs is the question each one asks of that evidence.

	Bull case	Bear case
The question	What has to go right, and why is it likely?	What could go wrong, and why is it plausible?
Built from	The company's numbers, trends and plans	The same numbers, read for weak spots and risks
A good one is	Specific, checkable and honest about what the price already assumes	About the business, not about the share price's last few weeks
It is not	A price target, or a reason to stop reading	A list of everything that could ever go wrong

The words that matter most in both definitions are "than the market expects". A great company can still make a weak bull case if its share price already assumes everything will go right, and a struggling company can make a decent one if expectations are low enough. The question is never just "is this a good business?" It is "is reality likely to be better or worse than what the price already assumes?"

Why write both, and why the bear case first

Once you like a stock, everything starts to look like support for it. Psychologists call this confirmation bias, and it is a big reason people hold on to a story after the facts have changed. Writing a bear case makes you go looking for the evidence you would rather not see.

The order matters too. Write the bull case first and the bear case tends to become a list of objections to knock down. Write the bear case first and it gets your full attention, and the bull case then has to answer it.

Professional research teams build this into how they work: one person argues for, another argues against, and someone else decides. You can get most of the benefit on your own, with one page.

The one-page template

Copy this into your notes app or print it, and fill in the bear side first.

Company: its name and ticker. Date: today's date, so you know how old your numbers are.

For each side, bear first, then bull:

The claim. One sentence: "Over the next one to two years, this company will do worse (or better) than expected because…"
Three drivers. The three things that matter most for this business. Common ones are sales growth, profit margins, cash flow, debt, competition, pricing power and management's decisions.
The evidence. For each driver, a number, a trend or a fact you can check in the company's own reports, with its date.
What is already expected. What today's price seems to assume, for example its valuation compared with its own history or with similar companies.
What would prove it wrong. The specific sign, and when you would see it: next quarter's results, a product launch, a change in prices or costs.

At the bottom of the page, your read: which side has the stronger evidence today, the one or two things that will decide it, and how confident you are (low, medium or high).

Rather draft it with a chatbot? Can ChatGPT research a stock for you? includes a prompt that follows the same structure.

A worked example: a made-up coffee chain

To keep this about the method rather than any real stock, here is the template filled in for Harbor & Pine Coffee, a company we made up. Every number below is invented.

The bear case (written first)

Claim: coffee bean prices and wages are rising faster than Harbor & Pine can raise its own prices, so its margins will shrink over the next year.
Drivers: ingredient costs, labor costs, and a valuation that leaves little room for a slowdown.
Evidence: bean costs up about 30 percent over the past year, store wages up 6 percent, and one cut to management's margin forecast already.
Already expected: the shares trade at a higher price to earnings than most restaurant chains, so the market is paying for growth, not for shrinking margins.
Proves it wrong: margins holding steady for the next two quarters despite the higher costs.

The bull case

Claim: new stores and app orders will keep sales growing about 10 percent a year, and newer stores will grow more profitable as they mature.
Drivers: sales at existing stores, new store openings, and margins at the newer stores.
Evidence: sales at existing stores up 4 percent for three quarters in a row, 60 new stores planned this year, and newer stores' margins closing in on the older ones'.
Already expected: growth is the reason for the premium valuation, so the bull case needs growth to continue, not just to happen once.
Proves it wrong: sales at existing stores turning negative, or the newer stores' margins stalling.

The read

Both cases rest on real numbers, and they point at the same place: margins. If Harbor & Pine can absorb higher costs while its sales keep growing, the bull case holds. If margins slip again, the bear case wins, and the premium valuation becomes the problem. The next two quarterly reports will say a lot. Confidence: medium.

Notice what the read leaves out. It does not say buy or sell. It says what the evidence favors, what will decide it and how sure you are, which is what you need to make your own decision.

How to judge which side holds up

Specific beats vague. "Margins rose from 12 to 15 percent" is evidence. "Great brand" is a feeling.
Numbers beat stories. A vivid narrative is easy to believe. Check whether the figures back it up.
Check what is already priced in. A good business at a price that assumes perfection can still disappoint.
A case nothing could disprove is not a case. If you cannot name what would prove a side wrong, it is too vague to rely on.
Watch the side you wanted to win. Give it a second, harder look than the other one.
"Mixed" is a valid answer. When the evidence is balanced, say so. Forcing a conclusion is how people talk themselves into things.

From two cases to a thesis

Your thesis is the paragraph that ties it together: which side the evidence favors, the one or two things that matter most, and what would change your mind. Keep it short enough to reread in a minute when the next results come out, and update it when the facts change, not when the share price does.

How FolioLab does this with AI

FolioLab runs the same routine on any U.S. stock you choose, with AI in every role. Three AI analysts gather the evidence from the technicals, the fundamentals and the sentiment. A bull and a bear researcher argue over several rounds, each answering the other's last point. A research manager rules on the debate, a risk review pressure-tests the conclusion, and a head of research makes the final call. How a FolioLab scan works walks through every step.

Your report shows the strongest bull and bear arguments side by side in its Debate section, followed by the investment thesis and a 1 to 10 research score. It is a quick way to get a first draft of both sides, or a second opinion on your own. Either way, the deciding is still yours.

A few things to keep in mind

The example is made up. Harbor & Pine Coffee is not a real company, and its numbers were invented to show the method.
AI can be wrong. Every FolioLab report is researched and written entirely by AI (large language models), and two scans of the same stock can come out differently.
Research, not advice. This post, like every FolioLab report, is research and education, not investment advice.

Want to see the bull case and the bear case for a stock you follow? Get FolioLab on the App Store. Your first two scans are free.