I'm still in Italy, far, far away from the stock market.

Sitting next to an American businessman during my most recent flight to Europe, he asked me the same thing lots of people do when I tell them I'm going to Italy for a few months.  "What do you do over there?"  They can't imagine, especially when I'm traveling alone.

It's the last week of February and our weather is mild on the Italian Riviera year round.  Today there isn't a cloud in the sky and it's sixty degrees, warm enough to get by with a sweater.  So I did what everybody in Savona was doing today.  I walked down to the Lungomare, the walk by the sea, and I sat on a bench in the sun looking out at the shimmering blue water.

I didn't understand what walking was really about until I started to spend longer periods of time in Italy.  It's not just a way to get from Point A to Point B for the Italians.  Walking is what people do.  It's a social activity, a hobby, a chance to get dressed up in your best pair of boots, window-shop and chat with your neighbors. It's built into the fabric of everyday life.

Even though I brought a book to read, I didn't open it, transfixed by the normal, everyday pageantry of the Savonese. The whole town was there.  Middle-aged daughters with their white-haired mothers on canes. Young couples cooing at babies in strollers.  Thick-wasted lovers, married forever, strolling slowly hand-in-hand - the same way they've done for years. The wifeless men, widowers, clumped in their own little groups.. A random tourist or two from the cruise ship in the port.  Families with young children on their first two-wheelers - they'd ride and wait, ride and wait. Everybody talking, everybody telling stories, everybody touching and kissing each other on both cheeks. All of them walking their dogs. "Say hello to your wife," they'd call.  "What a beautiful day."  An hour or so later, I knew the sidewalk would be almost empty, everybody home with their families for Sunday lunch, the same routine they follow every week.

In the United States, I'm always trying to accomplish something.  I need to exercise more or study Italian harder.  I need to fix things, get a better hair cut, make lists, solve major social problems, write books, figure stuff out.  I'm always figuring stuff out.  If I just read one more research report, I can beat the S&P 500.  But in Italy I am perfect exactly the way I am.  I already have everything I need and sitting on a bench in the sun on a beautiful day in February, it's all I can do to keep myself from bursting into tears out of a gratitude so pure, so complete, it can scarcely be contained.

That's what I do over here in Italy. Not all that much.  I sweep the kitchen floor every morning.  Maybe I'll run across the street to grab a wood-fired pizza.  Sometimes I write.  But mostly I take walks and refocus my heart on the everyday beauty of being alive..

Do's and Don'ts of Market Corrections

Anybody can be a good investor in an up market.  It's the corrections that weed out the amateurs.

If you want to get rich with stocks, here's what you're not allowed to do:

1.  Sell everything because you are absolutely positive the market's going lower.  Even if you're right, even if the market drops another 5 or 10% before it turns around and goes back up - you will screw it up.  Because you will not buy back in.  You will be all puffed up from having been right about the decline and that smug pessimism will turn into your pride and joy, your guiding star.  You will keep sitting there with your cash in a money market fund paying a tenth of one percent and you won't believe any bounce up is real.  You'll miss the whole damn thing.  I've seen it a million, gazillion times.

If you want to get rich with stocks, here's what you have to do:

1.  Catch your breath.

2.  Wait for the market to stop collapsing.

3.  Look at your account with a steady hand.  

4.  If you have losses in a taxable account (not your retirement accounts), this is where you should be ruthless.  Lock in losses and bank your tax-losses against any future realized gains.  If you like the stock you just sold, immediately repurchase it in another account (in your spouse's name, in a retirement account).  Do not wait.  When the market starts to recover, you want to be an owner and participate.  This is just a strategy to get some use out of your short-term (normally unrealized) losses so that you are making maximum use of market volatility.  

5.  If you have cash, add to best quality favorites.  

6.  If you have stocks you really don't like, once again, be ruthless.  Don't worry about "getting back your investment" or "waiting until you break even."  That's yesterday's news.  Go ahead and re-position the money into your favorites. But if you sell something, don't try to get too smart and time the turn around.  Buy now.