Battle Scars: What This Article Reveals
- Why every crash feels like "this time is different" — and never is
- The specific lessons each crash burns into survivors
- How your mindset completely transforms after experiencing chaos
- The survival rules that veterans never break
- Why crash experience is the greatest asset in finance
- How to build the veteran mindset before your first crash
The Market Veteran
30+ years in markets. 5 crashes survived. Still trading. Still learning.
There's a saying on Wall Street: "You don't really know yourself until you've seen your portfolio cut in half."
First-time crash survivors remember every moment. The disbelief. The denial. The despair. The capitulation. And for most—the catastrophic mistake made at the worst possible time.
But something different happens to those who survive multiple crashes. Each one carves new wisdom into their operating system. After five crashes, you don't see markets the same way. You can't.
This article distills the hard-won wisdom of market veterans—lessons that can only be learned through experience, but that you can absorb before your first real test.
Black Monday 1987: "Markets Can Fall Forever"
The Scar: -22% in One Day
October 19, 1987. The Dow dropped 22.6% in a single session—the largest one-day percentage decline in history. There was no warning. No obvious trigger. Just free-fall.
The lesson: Your exit strategy should be written when you're calm, not when you're watching screens turn red. If you don't know exactly when you'll sell before you buy, you're gambling.
"On October 19th, I learned that markets have no memory, no conscience, and no mercy. They'll take everything if you let them."
— Anonymous 1987 Survivor
Dot-com Bust 2000: "Narratives Lie"
The Scar: -78% NASDAQ
"It's a new paradigm." "Profits don't matter." "The internet changes everything." The NASDAQ went from 5,000 to 1,100. Pets.com, Webvan, and hundreds of "can't miss" companies vanished entirely.
The lesson: The story doesn't matter. The numbers matter. Amazon survived because it eventually made money. Pets.com didn't because it couldn't. Know the difference.
"The four most dangerous words in investing are: 'This time is different.'"
— Sir John Templeton
Financial Crisis 2008: "Everything Is Connected"
The Scar: The System Almost Died
Lehman Brothers collapsed. AIG needed $180B in bailouts. The entire global financial system came within hours of complete shutdown. "Diversified" portfolios got crushed because everything was secretly correlated.
The lesson: Never assume you can exit when you want to. Size positions for the worst-case liquidity scenario, not the average day.
"In a crisis, all correlations go to 1. You're not as diversified as you think."
— Ray Dalio
COVID Crash 2020: "Speed Kills"
The Scar: -34% in 33 Days
The fastest crash in history. The S&P 500 dropped 34% in just 33 days. Then recovered completely in 5 months. Those who panic-sold at the bottom missed one of the greatest rallies ever.
The lesson: When everyone agrees, the opposite is usually about to happen. Maximum pessimism = maximum opportunity. Maximum optimism = maximum risk.
"Be fearful when others are greedy, and greedy when others are fearful."
— Warren Buffett
Rate Shock 2022: "Gravity Returns"
The Scar: "Free Money" Ends
After years of zero rates, the Fed raised rates at the fastest pace in 40 years. "Forever growth" stocks collapsed. Crypto crashed 75%+. SPACs and meme stocks evaporated. The era of "stocks only go up" ended brutally.
The lesson: There are no permanent strategies—only strategies for specific environments. The best traders adapt their approach as conditions change.
"Markets can remain irrational longer than you can remain solvent."
— John Maynard Keynes
The Veteran Mindset: Before and After
After surviving 5 crashes, your entire mental operating system transforms:
- "This time is different"
- "It can't go lower"
- "I'll sell when it recovers"
- Focus on potential upside
- All-in on high conviction
- Exit plans are for pessimists
- Volatility is bad
- "It's never different"
- "It can always go lower"
- "I already have my exit plan"
- Focus on potential downside
- Never more than X% in anything
- No exit plan = no position
- Volatility is opportunity
The 5 Unbreakable Rules of Crash Survivors
Never Risk What You Can't Afford to Lose
The money you need for rent, food, or emergencies should never see the inside of a brokerage account. Only risk capital you can genuinely afford to lose 100% of.
Size Positions for the Unthinkable
Ask: "If this goes to zero tomorrow, will I be okay?" If the answer is no, you're too big. Position size is survival. Everything else is tactics.
Always Have a Plan Before You Need One
Know your exit before entry. Write it down. Automate it if possible. Decisions made during crashes are almost always wrong.
Keep Cash for Chaos
The best opportunities come during the worst moments. If you're fully invested during a crash, you can't buy the discounts. Cash is optionality.
Survive First, Thrive Later
Your #1 job during any crisis is not to make money—it's to not lose money irreversibly. Survival enables future success. Destruction is permanent.
The Veteran's Creed
"I don't need to catch every rally. I need to survive every crash. If I'm still in the game, I can always make it back. If I'm wiped out, I can't."
The Bottom Line
You don't have to live through 5 crashes to gain 5 crashes worth of wisdom. You just have to be willing to learn from those who did.
The next crash is coming. It always is. The only question is: Will you be one of the survivors who emerges stronger, or one of the casualties who has to start over?
The choice is made now—in how you position, how you size, and how you prepare—not in the heat of the moment.
Crashes don't create wisdom.
They reveal whether you already have it.