What experts say: Panic!

Thursday, 16 October 2008 19:17

Written by essbee

It's been a bad week on Wall Street. All world indices are avalanching downward, and the July to September summary of 401(k) statements in people's mailboxes look like black diamond ski slopes.

It's a lousy time to be an investment banker, or a hedge fund manager, or planning a December retirement.

So Forbes.com asked some of the nation's foremost experts in financial crisis what people should do in a moment like this. Their message (and picture this in large, friendly letters): PANIC.

"For those of you who have remained resolute in your belief that stock markets will turn around eventually, I urge you to close your eyes, take shallow rapid breaths, and begin freaking out immediately." added Shiller.

Stefan Nagel, an assistant professor of finance at Stanford recently laid out a historic five-point plan for panic that he hopes will help the people fall apart as quickly as possible. The plan calls for investors to abandon their daily routines entirely, take a deep look at their portfolios and engage in a week-long period of hair-raising shrieking, arm flailing, gasping and gnawing on one's fingers while rocking back and forth in alternating bouts of maniacal laughter and gentle sobbing.

Early reactions to experts call for full-blown panic have been quite positive. Many investors said that they appreciate the frank advice and will try getting into panic mode as soon as possible.

"For most of the day tomorrow, I intend to do my part of panicking by remaining in my home and getting very worked up about my dwindling portfolio size," Paul Wilson said. "And then at night, I plan to lie awake in my bed and be scared to death about the evaporation of my hard-earned money. Then I plan to run out into the streets in my bathrobe and shout that the Sky is falling."

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