Surprise.  Surprise.  Surprise.  Enough already.  Second biggest drop of Dow in history.

Actually, no surprise to us.  As we were saying in our last letter panic sell offs are invariably followed by an automatic bounce (what technicians call the dead cat bounce –we said this on the radio one time and the program was deluged with calls from angry animal rights people) and then in the majority of cases retreats to test the panic low.  Today the Dow took its second biggest plunge in history.  Right now predicting near term market movements is a business for pundits with crystal balls and brass cojones.  No one repeat no one knows what happens next.

But.  Note, but.  But we know what to do.  The present trend tends to continue.  So we continue doing what we have been doing.  Short.  Should we be looking around for some issues of value in this car wreck?  Yes.  But let’s be certain that the wrecking is over first.  And it is not yet over.  Catching the bottom is less important than waiting calmly until the carnage is over and then picking over the wreckage.