What's that smell?

Its fear.

Apparently a lot of people I know (me included!) had money in the stock market. Money that was there (and theirs!) a month ago and now sadly, 40%+ is gone.

I have heard friends and friends of friends say that they are no longer going on vacation/buying a new car/purchasing that cabin on the lake/eating out (?!).

With the market falling everyday, and the cable pundits screaming "don't sell," or "sell if you ever want to see your money again - or in the next 5 years," or "12 more days like today and the Dow will be zero," it is easy to see why many Americans are confused and more than a little panicked.

My favorite quotes so far came from a WSJ article:

Investors seem, above all, to be in a state of shock, bludgeoned into paralysis by the market's astonishing volatility. How is Theodore Aronson, partner at Aronson + Johnson + Ortiz LP, a Philadelphia money manager overseeing some $15 billion, holding up in the bear market? "We have 101 clients and almost as many consultants representing them," he says, "and we've had virtually no calls, only a handful." Most of the financial planners I have spoken with around the country have told me much the same thing: Their phones are not ringing, and very few of their clients have even asked for reassurance. The entire nation, it seems, is in the grip of what psychologists call "the disposition effect," or an inability to confront financial losses. The natural way to palliate the pain of losing money is by refusing to recognize exactly how badly your portfolio has been damaged. A few weeks ago, investors were gasping; now, en masse, they seem to have gone numb.

In my family we have a saying: "Ignore it - it will go away." Annoyingly, it doesn't work, but each of us have tried (and failed) to go with this advice on one occasion or another.

Apparently our family saying has been adopted by the country?

A friend's mother announced she wasn't reviewing her brokerage statements "for a while." Just wasn't going to look. If only it were that easy?!

What are you doing? Not content to sit and watch,I am at least generating some commissions. I shifted much of my beleaguered portfolio out of weaker stocks and into high dividend paying blue chips, beaten down in the frenzy of last week (best example? swapping Tim Horton(THI), the Canadian donut shop for GE, with its 7% yield. Call me crazy.)

Also, I having been buying my old friend Berkshire (BRK.B). Buffett has got to be going nuts in this market - why not having the world's best picking stocks for you? I have been a big fan of his since 1991 - when as a graduation gift, a friend got me the collected ramblings of Warren's shareholder letters. Amazing stuff. He hasn't let me down yet!