(Editor's Note: This article was originally published on Real Money Oct. 15, 11:30 a.m.)

I had a nice barrage of e-mails and calls from folks who wondered why I wasn't more panicked about the overall market and especially the energy stocks.

After all, while there may not yet be blood in the street in the overall market, there is some pretty good bleeding in the oil services sector right now. I have a stake in the sector and it's dropping as fast as the Orioles' World Series chances. According to many, I should be very concerned and upset about this whole thing.

Let me explain how I stay calm. I spilt the world into two portfolios. One is the regular deep-value stuff that I have invested in very profitably for decades now. The other is community bank Trade of the Decade stocks and I view that as an entirely separate basket and right now it is by far the bigger basket. I have favored them for a couple of years now and own dozens of them. They have hardly moved in the past month.

For those of you have been following along, you know my mantra is always stay small and move slow. I have been whining about the lack of cheap stocks all year, so this policy has left me a high cash balance as all this began a few weeks back. I am one of the few people who are cheering for lower prices in the broad market, so I can buy super-safe and cheap stocks at a huge discount from asset value. At this point in my life, waking up to find a market collapse created a huge pool of stocks of healthy companies trading below liquidation value would be a very happy event from a long-term perspective.

Having said that I am human and I wince a little when I look at stocks that I bought in the past few months like Hercules Offshore (HERO) , Nobel(NE) - Get Report and Rowan (RDC)  that have just collapsed. Ordinarily I would be enthusiastically buying more, but oil below $80 is a bit of a game changer, so until I see where oil levels out I am going to hold off buying any more for the moment.

I am not a great macro guy, but for what it is worth my views are closer to Dan Dicker's than the $60 a barrel crowd when it comes to oil. The Saudis and Kuwaitis may be comfortable with this strategy, but other members of OPEC are not that thrilled with the drop in oil. Iran and Iraq, along with Venezuela, are less than thrilled with the move. According to a Reuters article the Iranian oil minister issued a press release saying, "The drop in oil price is short-lived." In addition to pressure from its alleged partners, it is safe to say that Russia is going to be looking to put pressure on OPEC to get prices back above $100 sooner rather than later.

The other reason that I am not too upset is that I have a very long view of the market and place far more value on what prices will be in five years than where they are today. I have no institutional investors looking over my shoulders, so no one except my wife is going to express any concern about drawdowns in a bad market. I cannot tell you what a huge advantage that is in times like the past few weeks. I can rely on my strong belief that the world is not going to end and the global economy will recover at some point in the future and we will see higher stock and energy prices that allow me to sell at a large profit.

It is hard to panic when I have lots of cash and community banks as the bulk of my portfolio. I am screening for new cheap stocks, but a quick look this morning showed that those stocks that have strong balance sheets and cheap stock prices and declined in price in the past month are the energy and mining companies I already own for the most part. The markets are down, but even the hard-hit Russell 2000 is only 12.4% below all-time highs. It is not yet an inventory creation event. Just in case it turns into one I am putting below market bids on a bunch of community bank stocks that are almost cheap enough to buy.

Panicking over every news announcement or intermediate move in stock prices is not going to make me money as a long-term investor. When you take a long view of five years or more there will be bumps along the way. So far, this is just a fairly small bump that is yet to create additional opportunities.

At the time of publication, Melvin was long HERO, RDC and NE, although positions may change at any time.

Tim Melvin is a writer from Stevensville, Maryland, who spent 20 years a stockbroker, the last 15 as a Vice President of Investments with a regional firm in the Mid Atlantic area. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Melvin appreciates your feedback;

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