IT IS an obvious quirk of human psychology, but by telling someone not to panic you will have automatically instilled a heightened sense of terror in your subject.

As the share prices of leading South Korean shipbuilders were tumbling amid concerns over newbuilding cancellations, Cosco Corp’s president Ji Hai Sheng made the unfortunate mistake of using the ‘p’ word.

Presumably capitalised and printed in large friendly letters in his speech, he dismissed the cancellations and suggested people were simply panicking.

He was right of course, this is a specific issue for certain yards, unrelated thankfully to his own business. While analysts and observers have been predicting a rash of cancellations amid tight money supply and a raft of underfunded emerging shipyards, the number of high-profile cancellations among reputable shipyards with a history has been small.

But neither such facts nor Mr Ji’s soothing words could stop the world’s third-largest shipyard from leading a stock plummet over concerns that more bad news could be on the horizon.

It would appear that the ‘panicking’ investors are not quite as confident as some of the Asian owners over what is heading their way. And they are not alone. Just last week Goldman Sachs downgraded several Asian bulk carrier stocks, including China Cosco, citing an oversupply of capacity in coming years and weaker expectations for 2009 and 2010.

Reading that over your cornflakes, amid a hailstorm of similarly doom-mongering prophesies on the financial pages is unlikely to instill much confidence in your average investor. Still, whatever you do, don’t panic.