As random, ahem, as my reference to the Brady Bunch might seem so too are the movements in the market as the bear market condition continues to process through to its conclusion.

After the rally on Monday I commented on the lack of health belied by such a huge move up. It seems that moves of greater than 5%, regardless of direction, are going to be a normal thing as we work to the next bull market.

A huge focus in my writing and more importantly in my practice has been to brace for something bad and at the same time keep a sense of reason.

On yesterday’s post a comment came in that said “screw iceland, my retirement portfolio is shrinking fast.” Maybe that is a joke and I was too dense to pick up on that but if not then that is a deplorable attitude. There may be issues in Iceland (still trying to resolve conflicting accounts) with importing food, that’s access to food. Bear markets to equities come along every few years, trouble accessing food does not so get a grip and while your at it, a clue.

One notion that has been moving around is that many hedge funds have gone to cash. I have no idea if that is true or not but it seems odd to me. Delever, sure, sell out I don’t get. Barry was on PowerLunch trying mightily to make the point that down 40% is the time to think about getting back in and for anyone aggressive to consider leverage, he disclosed using a double long ETF to do so.

Buying a lot of stock is reasonably a difficult proposition for many people but this idea makes the point of how much of a mistake selling out would be

I disclosed recently selling the last of my double short with the same general idea of getting a tad longer; a comment I’ve made a few times which is that the risk of a big drop is less after a big drop. That is an important consideration for you psyche as well as for any tactical considerations.

Down forty whatever percent is a lot. Fear is sky high as is volatility, people don’t know what to do and are getting worked up enough to leave comments like the one I ragged on up above.

It is ok to not know what comes next, not know where the bottom is and to be worried. No one ever did financial damage to themselves by being unsure and worried. People have damaged themselves financially by acting on their being unsure and worried.

One bit of clarity. I said I sold the double short ETF to get a little longer but on Monday I sold a stock (not part of a hedge strategy) at the end of the day. That may seem contradictory but 10% up in a day seemed like a good time to take something off.

Last 5 posts by Roger Nusbaum

• Health Care Bill Passes? - March 22nd, 2010
• Arlo's Story - March 20th, 2010
• The Big Picture for the Week of March 21, 2010 - March 20th, 2010
• The Best First Day Ever? - March 19th, 2010
• Thursday Tidbits--Special March Madness Edition - March 18th, 2010