Market Crash Mindset & Long-Term Investing Discipline

Composure under pressure beats raw talent.

1500m final: favorites Jakob & Kerr lost when Jakob mis-paced early and American underdog Cole Hocker timed kick perfectly.

Why: Championship races reward tactical execution and nerve, not just season-best times.

"it's not always the fastest person who wins. It's the person who shows up that day and has the best tactics"

Do nothing for 30-90 days after a market crash unless the wolf is at the door.

Speaker_2 created a personal rule: first ask if the downturn creates an existential crisis (over-leverage, stretched finances). If not, simply wait 30-90 days before any action.

Why: Most losses come from emotional reactions (fear/greed) rather than fundamentals; time allows rational assessment.

"if the wolf is not at the door, simply do not react. Just do nothing for 30 to 90 days and then see where you land."

Missing the 30 best market days cuts long-term returns by ~83%.

A chart starting with $10K in 1990 shows ‘set & forget’ grows to $181K; missing the 30 best days leaves only $30K.

Why: Market gains are concentrated in a handful of explosive days that cannot be timed consistently.

"if you missed the 30 best days, you would have only $30,000... if you just set it and forget it, you would have 181."

Define 3 big annual shifts and ignore everything else.

Speaker_2 writes three ‘shifts’ for the year, re-typing them weekly in Slack and only doing tasks that tie to them.

Why: Reduces noise and prevents constant re-optimization; forces focus on highest-impact changes.

"I wrote out for the year, I said, here's the three big things... every single week, I write down that shift again in our Slack... if I am going to do something today that doesn't tie to that shift, I just simply don't do it."

Stop checking prices; group-chat sentiment is a better real-time indicator.

Speaker_2 wakes up, glances at the group chat: if it says ‘the world is ending’ or ‘we’re going to Valhalla’ he knows directionally up/down without looking at quotes.

Why: Reduces emotional spikes from minute-by-minute price feeds; leverages social cues for macro sentiment.

"I don't even check the market. I just look at that text and I know directionally is the arrow up or down."

Reacting is emotion-driven; responding is logic-driven after cooling off.

Speaker_2 distinguishes ‘reaction’ (immediate fear/greed) from ‘response’ (rationale written down with counter-arguments).

Why: Written justification forces clarity and reduces costly knee-jerk trades.

"I define a reaction as making a decision in the moment based on an emotion that I'm feeling... responding, being I have let the emotion cool off... I could write down the counterargument for it."

80-20 index approach beats 95% of hedge funds.

Acknowledging lack of edge outside private startups, Speaker_2 uses broad index funds to avoid huge mistakes rather than trying to outperform.

Why: Empirical data shows ~5% of hedge funds beat the market; thousands of analysts still fail, so amateurs should not try.

"I'm better off sticking to an 80-20 type of strategy where I just avoid huge mistakes and don't try to beat everybody."

Passing the baton early can create multi-generational value.

Richard Farmer’s father handed him the keys at 21; the laundry business grew from $180K to $75B market cap (Cintas).

Why: Early responsibility combined with retained family ownership (≈20%) aligned incentives and enabled long-term compounding.

"the dad goes, Look, this isn't working. Here's the keys, man. You run it... the Farmer family still owns something like 20%"