Panique! The scent of desperation

We've reached the point of full-blown worldwide stock market panic, something not seen for at least 30 years. People are scared, physically scared, and they're selling off stocks at almost any price to be able to hold on to something, rather than lose everything. So many stocks have been driven down below any rational valuation that it should be a great time to buy, except that people are afraid that prices will go still lower.

This is the point where investors have to look at the fundamentals of companies rather than their stock prices to regain their composure. The question is: Will this company go bankrupt? Companies such as Kraft Foods, Johnson & Johnson, Heinz and Procter & Gamble are going to stay around--people need their products in good times or bad. In tech stocks, IBM, Cisco, Microsoft and Apple certainly aren't going away, although their stocks could go lower. On the other hand, I think that Ford and GM are radioactive, because both companies have a significant chance of failure. People will always need cars and trucks, but there are lots of alternatives, many of which are better managed and better prepared to handle market conditions. And, I wouldn't touch any of the financials with a ten-foot pole, no matter how much of a "bargain" they become. There are still far too many unanswered questions about who will live and who will die.

With all that said, I completely understand the panic that investors are feeling. People who are in their 50s and 60s are seeing their retirement funds obliterated, and they may not have enough time before retirement to recover. My parents, both of whom lived through the Great Depression, often told me what happened to them and their families, and I've read extensively about the Depression's causes and effects, but I'm finally beginning to understand.