Just the other day we were talking about getting "blindsided". We were in a stock that came out of the blue with an earnings shortfall warning. That stunk. Then there is a blindside of another type, like when some nuts blew up several subway areas of London. The world markets fell in a heap, and heading into the open, the futures were off fairly substantially.

The question on a day like that is, what do you do? The answer of course is "nothing". You weather the storm and sit tight. Why? Because the market is an odd place.

The financial markets almost disgust me. In fact, they do disgust me. We are talking about money here, and nowhere in the world is the concept of greed more evident than in Wall Street. For someone like me who is oft quoted as saying money isn't everything, it seems odd that I'd be involved in the business of it. But that's indeed where I am, and sometimes it disgusts me.

Why? Because when something like this happens, the market goes into calculation mode. They look at the airlines, the drop in travel, the overall fear factors and then calculate where to make their money. In a situation like the London bombing, the first reaction is a knee jerk sell off. But then the calculations get made, and in a matter of days, things are quite close to where they were before the event. It's the ultimate example of "reverting to the mean".

So, in a situation like this, where there didn't seem to be any biological, or nuclear events, they instantly decided that the markets had become a bargain and they moved in. Cautiously of course, but they bought none the less. Sitting tight during most of these sorts of events is indeed the only thing to do. Panicking out will just lose you money.

What about the stocks you have? First, remove ALL stops the minute you get up. When the market is looking to fall hard on an "event" you'll get stopped out almost immediately, but at a horrid price. Remove your stops and then make an assessment of the panic. If it's not something that's going to really bother the market, then sit out the day. If it looks like it could be "really" serious, sell the first decent bounce, and wait to re enter lower.

Terror stinks but it's what we have today. The market's react, just don't let them get you panicked. Go slow, and use your head. Often times, you'll end up in pretty good shape.