Hold fast as the storm passes

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Sooner or later you’re going to get caught out — in more wind, in bigger seas, in more of everything than you hoped for. That’s just part of being on the water. When it happens, you don’t want to panic or overreact. Safer to let cooler heads prevail.

Assess the situation, make sure everyone is wearing a life jacket, stow your gear and then, if conditions allow for it, slowly thread your way to a safe harbor. Sometimes the prudent thing to do is to heave-to or jog into the weather while you wait for it to pass. Squalls — even violent ones — move pretty quickly.

The events of the last two weeks are not unlike being “caught out” in a small boat in very unsettled weather: European debt contagion, Beltway politics and gridlock, the S&P downgrade of U.S. debt, whipsawing markets and panic selling. Where’s the life raft?

The smart thing to do is stay with the ship and not veer wildly from your planned course. Don’t cut and run prematurely. Better to let the storm clouds pass.

Watch your business. Keep an eye on your competition and your markets. Focus on what you can change, where you can have an impact. “Tend to your knitting,” my mother used to advise me. You’re not going to be able to affect the debt crisis in Greece or Spain or Italy.

Let���s hope your business and portfolio are right-sized for the conditions, although to be fair, the level of volatility and fear the last two weeks reached record levels. Prudent sailors prepare for heavy weather even as they hope it never arrives.

Good seamanship starts before you set foot on the boat, with planning and preparation. Sometimes the best decision you make is simply to keep your boat safely in her slip or on her mooring. To know when not to venture out.

Keep a sharp eye on the weather. Economically, is this just a passing squall or the start of a lengthy new storm season? Remain adaptable and open to change. Make sure your crew is calm, rested and well-fed. It’s up to you to set the tone. Don’t lose your focus, and don’t deviate from your long-term business plan without a good reason.