They have to have a sound balance sheet, i.e., good balance of sales and earnings and debt. One measure billionaire investor Warren Buffett uses is whether you would be willing to own the stock in a company if you had to hold the stock for five years. Lippman said if you have a solid company with a track record and good management and steady growth, you wouldn't worry. If you had one of the many Internet companies with poor earnings or no earnings, you would be worried. Stocks really reflect companies and their performances over the long run.
Investors get too carried away with the indices.
The worry about inflation and the Fed credit tightening is contributing to the down market now, but that's a good thing. It helps us realize the Fed is still aware of what's important - low inflation. For Lippman the market decline is welcome. I just love 'em. If you've got cash, they provide a great buying opportunity.