In buying what is too cheap not to own, I've left myself well-positioned even if I am dead wrong with my cautious approach. If things do blow up in the next few years, existing positions will feel some pain, but I will have a lot of cash to take advantage of the point of maximum pessimism.

If you aren't concerned about the markets and the economy right now, I suspect you just aren't paying attention. Rely on caution and value to protect yourself no matter what happens out there.
At the time of publication, Melvin was long PSEM, MFLX, MT and VISI, 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; click here to send him an email.

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