A plan should survive things that have never happened before.
Rare events are less rare than they look.
A year begins. A big fall, or calm? Swipe. Don’t think.
A big fall comes about one year in three. It is part of the ride.
← Red LinesRed Line 17 of 48 The idea The story Where you see it Where it bends This game’s numbersHow strong the proof isAStrong proof Where it comes from
A long calm record feels like proof. It isn’t: the worst day in any history was once a day that had never happened before.
A turkey is fed every day for 1,000 days, and each day its trust in the farmer grows. Day 1,001 is the day before a holiday dinner. Nothing in its data warned it.
Markets have fallen in ways nobody had seen before: on 19 October 1987 the Dow Jones fell 22.6% in a single day.
You can’t prepare for everything. Prepare to survive, not to predict.
Yahoo Finance: S&P 500 monthly historyClosing milestones of the S&P 500 (Wikipedia)J.P. Morgan: intra-year declinesLPL Research: a big up year with a sharp drawdown
Since the 1960s, study after study has found that big market moves happen far more often than the usual bell curve says.
- The Variation of Certain Speculative Prices Benoit Mandelbrot, Journal of Business 36(4), 394-419, 1963
- Empirical properties of asset returns: stylized facts and statistical issues Rama Cont, Quantitative Finance 1(2), 223-236, 2001
Checked 2 Nov 2026 · How we grade
- A Strong proof: Many good studies or long official data, from different teams or countries, point the same way.
- B Good proof, with limits: Solid studies agree on the direction, but the size varies, or the data covers few places or few kinds of people.
- C Mixed proof: Some good studies for, some against, or the evidence covers only part of the line.
- D Thin proof: Mostly one book’s argument, one survey or stories. It may be wise, but it has not been tested well.
- = True by the sums: It follows from arithmetic, so no study can overturn it. We still show what real data says.
Nassim Nicholas Taleb, The Black Swan (2007). In our words, not quoted.
See it in numbers: Safe havens (From Zero)
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