Yesterday I touched on the debilitating effects of a loss of nerve and how corporate psychology can make bad things worse.

Best Buy, one of the better performing retailers in recent months (in part because of the demise of arch-rival Circuit City), reported a same store sales decline of 4.9 percent in its most recent quarter. The company remains healthy, with an overall revenue increase of nearly ten percent and net earnings approaching $600 million in the same quarter. Still, Best Buy admits it left business on the table.

The Wall Street Journal reports that “company officials…acknowledged that they had slashed inventory levels too severely amid last year’s drop in consumer spending, and wound up missing out on sales of flat-panel television sets in January and February because of depleted supplies.” Oops.

This isn’t a knock against Best Buy. The company is doing a good job overall of navigating the economic crisis. But as CFO Jim Muehlbauer said, “We expect consumer spending to remain challenging in fiscal 2010, and the complex mix of external factors that will influence their behavior makes forecasting the future increasingly difficult.” Indeed it will be, for all of us.

In this environment it’s easy to say that we should err on the side of caution. But like cars at a four-way stop each waiting for the other to go, if none of us move no one will get anywhere. This is no time to be careless (when is?), but sometimes being too careful can be just as bad.