Learning From 130 Years of Stock Market Crashes

Markets crashing? Interest rates spiking? Inflation roaring? Welcome to history. This week, we dig into 130 years of stock market meltdowns—from the panic of World War I to the Great Depression, 1970s stagflation, the dot-com collapse, and the 2008 financial crisis—to uncover timeless lessons that can fortify your financial future.

Joe Saul-Sehy is joined by Miranda Marquit, Jesse Cramer, and OG to examine how investors have historically responded to chaos… and how you should, too. You’ll learn why diversification matters, why panic rarely pays, and why staying the course (even when it’s scary) can be the smartest move of all.

Of course, this wouldn’t be the Stacking Benjamins Show without a trivia detour that involves mailing children through the U.S. Postal Service (yes, that happened). Buckle up for laughter, insight, and financial takeaways that are as practical as they are entertaining.

• What WWI, the Great Depression, and 1970s inflation can teach us about investing
• Why “The Lost Decade” wasn’t a loss for long-term thinkers
• How to build a resilient portfolio that weathers the storm
• Our infamous trivia game: How much could a kid weigh and still be legally mailed in the 1920s?
• A few money-saving hacks, podcast updates, and your weekend preview from the basement

Whether you’re a seasoned investor or just building your financial foundation, this episode will leave you smarter, more confident, and—let’s be honest—way more amused than the average market history lecture.

Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201

Enjoy!

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Our Topic:

Stock Market Crashes: A Look at 150 Years of Bear Markets (Morningstar)

During our conversation, you’ll hear us mention:

• Historical crashes overview
• Market volatility
• Crash triggers
• Economic recessions
• Investor psychology
• Panic selling
• Recovery timelines
• Bear markets
• Speculative bubbles
• Market cycles
• Diversification importance
• Risk management
• Crash predictions
• Government interventions
• Monetary policy effects
• Stock valuations
• Impact on retirement
• Behavioral finance
• Media influence
• Crash myths
• Long-term investing
• Portfolio resilience
• Lessons learned
• Financial crises comparison
• Market regulations
• Investor education

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Our Contributors

A big thanks to our contributors! You can check out more links for our guests below.

Miranda Marquit

Another thanks to Miranda Marquit for joining our contributors this week! Learn more about Miranda and how she can help you by visiting Miranda Marquit | Cultivate Wealth | Gain Flexibility and Freedom

Jesse Cramer

Another thanks to Jesse Cramer for joining our contributors this week! Hear more from Jesse on his show, Personal Finance for Long-Term Investors – The Best Interest on Apple Podcasts

Learn how you can work with Jesse by visiting The Best Interest – Invest in Knowledge.

OG

For more on OG and his firm’s page, click here.

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Doug’s Game Show Trivia

• What was the maximum weight for a child to be sent through the USPS when it was legal to do so?

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Join Us on Monday!

Join us on Monday when we’re helping you live better, retire happier AND with more money.

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Miss our last show? Check it out here: Rethinking Earning and Spending (with “Money With Katie”‘s Katie Gatti Tassin) SB1694.

Written by: Kevin Bailey

Episode transcript

STACK 06-13 Market History -steve

[00:00:00] OG: I mean, you’re living in your mother’s basement writing a blog on finance. Really, you should stay off the computer son and get a job. Seriously

[00:00:13] Doug: live from the basement of the YouTube headquarters. It’s the Stacking Benjamin Show.

I am Joe’s mom’s neighbor, Doug, and they say that those who don’t learn from history are destined to repeat it. So what can we glean about setting up our portfolio from the stock market crashes of the last 130 years? We’ll pick several and walk through case studies of how best to weather those storms.

Plus, because it’s Friday, you know what that means? I’ve fired up my trivia engine and we’ll see which of our contributors can climb the mountain to be today’s champion. And now a guy who still believes in the latte factor, but only because he just spilled one on his keyboard. It’s Joe Saw Sea. Hi. 

[00:01:06] Joe: Its always a fun way to start your Friday stackers.

You get a phone call, you didn’t expect it, you knock over the cup and it’s time to get a new keyboard. Welcome to Friday. I’m super happy that you’re here. Sit back and relax. We haven’t done a history lesson, Doug, in a long, long time, so 

[00:01:22] Doug: gather around kitties 

[00:01:25] Joe: and we have never studied some of the biggest stock market crashes.

But before we do that on every Friday episode, this is a great chatty episode. To end each week, we’ve got uh, three contributors who are amazing podcasters in their own right. We will introduce our guest of honor. She really guest of honor, she’s like, has a frequent flyer card here on the Stacky Benjamin Show.

But let’s introduce her last, we’re gonna start with a guy across the card table from you. Mr. OG is showing up for work today. How are you, man? 

[00:01:53] OG: Who doesn’t like to work on a Friday in the summer? It’s so excited to be here. It’s the thank you for including me today 

[00:01:59] Joe: at Texas. It’s not bad. I would love it if people could actually hear the bubbles from the, uh, hot tub as you’re sitting in the hot tub, uh, recording.

[00:02:09] OG: Well, this time of year it’s a cold plunge, but cold. True. 

[00:02:13] Joe: Good, good point. The hot tub is just the sweat around you outside as you go for a walk down the street. And the guy who’s a walking hot tub of financial information, Jesse Kramer’s here. Maybe not my best segue dude. 

[00:02:26] Jesse: No, no. One of your better segues.

There’s a lot of imagery that comes with being a walking hot tub and uh, a lot of that imagery applies to me, so I’m on board. I’ve got jets, I’ve got bubbles. I’ve got a bad filter. I mean, where can we keep going? Can we get coming with this? 

[00:02:44] Joe: So was this your last health checkup we’re talking about?

Actually, I need to be 

[00:02:47] Jesse: cleaned. I need to be cleaned. I need to be scrubbed vigorously. And uh, some scantily clad women sat on me last night, so whoa, 

[00:02:56] Joe: whoa, 

[00:02:56] Jesse: whoa, whoa. 

[00:02:57] Joe: And that’s how you end the show. 

[00:02:59] Jesse: Was I saying something about a filter? Yeah. 

[00:03:03] Joe: Yeah. I think that filter needs to be replaced. And the woman who’s never been accused of needing her filter to be replaced, actually she probably, have you heard me?

Have you heard me? Are we allowed to swear on this show? I’ve worked with this woman for a long time. She also has no filter a lot of the time. Miranda Quez here. 

[00:03:20] Miranda: How are you, man? Doing great. I am not planning on hopping in the hot tub, but as soon as we’re done with this, I’m gonna escape to the mountains.

[00:03:26] Joe: Oh, show off. Nice. 

[00:03:27] Miranda: That’s what we do here in Idaho. We just escaped to the mountains. 

[00:03:31] Joe: Talk about just. Relaxing, fun and not Texas heat all in one. 

[00:03:37] Miranda: Exactly. And, and once you get to the certain places in the mountains, then I can be the scantily clad woman Jesse Dreams about. It’ll be amazing there. 

[00:03:45] Joe: I like it.

And there what is happening. And now Jesse’s flying to Idaho. There we go. For people, Miranda, that don’t know all the fine work that you do, you write for some of the finest publications you’ve written for just a ton of personal finance publications, but you also do financial coaching. You have some excellent mini courses.

Let’s talk about Miranda for a moment. 

[00:04:05] Miranda: Oh, yay. No. Yeah. I just have a couple mini courses on Gum Road. A lot of people ask me about my travel fund and a lot of people ask me about putting together my financial priorities. Uh, so I just went ahead and saved myself some time, made some mini courses, threw ’em up there, and uh, there they sit.

[00:04:21] Joe: It’s a great, it’s like Miranda gets her FAQ and she’s like, you know what? This’ll save me some time and maybe help a bunch of people at the same time. 

[00:04:28] Miranda: Yeah. So just, uh, it’s fine. And then, uh, some people asked me if I did coaching and I didn’t think that I did. So then I said yes to one person and it turned out I liked it.

So now if you ask me, I’ll do it, but I, I’m not out there like advertising it. I mean, does that sound like me? It’s like, oh, I’m doing things except on, yeah, you can ask me about it and hand me some money, but I’m not gonna ask. I was gonna say, Miranda, this 

[00:04:51] Joe: sounds like a hard sell to me. I kind of, but eh, I don’t, I dunno.

If I like you, I’ll do it. You were doing some work with a life insurance company and you were talking about just how fun being Miranda Marqui salesperson is just not, uh, where you wanna be. Oh, yeah. You know, they 

[00:05:05] Miranda: canceled the contract with me because I couldn’t meet my sales quotas because I was doing things like, I would go into a meeting with my trainer and then I’d leave the meeting and text them and say, Hey babes, you don’t want this whole life insurance policy.

Just put more money into your ira. Bye. 

[00:05:19] Joe: Oh my God. Well, why would you be with a comp? You have all people, why would you be with a company offering whole life insurance 

[00:05:24] Miranda: and I’m not anymore. 

[00:05:26] Joe: Yeah, 

[00:05:27] Miranda: it was a fun experiment. I learned a lot. We’re not doing that anymore. It’s like 

[00:05:31] Joe: a troja horse. I still have an insurance 

[00:05:32] Miranda: license, so I could talk about it, but, uh, but I’m not with a company anymore.

[00:05:37] Joe: Rango is in there representing a whole life insurance company just to disrupt sales. They’re like, why are. Why are sales down so much? Oh, because Miranda was here. All right, well, we’re gonna talk about history and uh, what we can learn from some of the biggest downturns in history. This was a wonderful piece for Morningstar.

We’re gonna dive into that, but first we’ve got a couple of sponsors to make sure that we can keep on keeping on, and you don’t pay a dime for any of this walk down history lane. Goodness. We’re going to hear from them. And then Miranda, Jesse, OG Doug and I going to walk through some of the biggest market crashes in history, and what could we glean from them?

This piece is written by Amelia Frederick and Amelia writes what we’ve learned from 150 years of stock market crashes, and for people with us on YouTube. I’m putting it up on the screen. Uh, Miranda, let’s start with you. The first thing that I notice is they showed this wonderful graph. The graph, by the way, starts in the late eighties, and then we look at 2000 through the next 10 years.

They call that the lost decade, the COVID-19 Pandemic Ukraine inflation shortages like all these downturns, Miranda. But there’s something else that’s even, even more pro prominent when you look at this thing. 

[00:07:02] Miranda: It’s all going up. Overall, I get people come to me and they say, oh, you know, I was worried about the market crashing, so I moved my money into some cash and bonds and aren’t you so proud of me?

And I’m like, no, no I’m not. Yeah, please, no whatcha doing? Why? Why, why did you do this? Why did you not talk to me first? Our system is basically set up to promote a stock market recovery. If we ever get to the point where the system is not promoting a stock market recovery, well then we’ve got bigger problems than what is money.

So, um, so might as well 

[00:07:32] Joe: grab your gun in a cave. 

[00:07:34] Miranda: I, and, and you know, I have a gun, so I’m good. I got my gun in my fishing tackle. I am ready to go. 

[00:07:38] Joe: And you go hiking a lot. So you know where the caves are. 

[00:07:40] Miranda: Yes, exactly. Overall, the stock market goes up. If you look things out and zoom out to like a 20 year period.

The stock market’s not ever been negative in a 20 year period. So. Keep on keeping on. Right. Stay the course. 

[00:07:53] Joe: I asked you the question be hanging out with us live on YouTube, says, Miranda took my line, but I think it’s pretty easy for people hanging out with us live. Jesse, let’s zoom out. I went down to the next graph.

Now we look at the 1870 through present, and we’ve had some bigger things than the last decade. I mean, there was World War I, world War ii. Mm-hmm. The Great Depression. We’ve got Vietnam, uh, Watergate, all these things, and yet, Jesse, and yet there’s something else you can see when you look at this graph.

[00:08:22] Jesse: Well it is, it’s a really powerful graph. First off, and I was gonna say, when I was a young guy and I bought my grandmother some jewelry that was a silver agitation. Much like, what is that? 18, uh, 1898. So 1894. Yeah. The silver agitation. Of course we all remember that one. Problems in the silver market. Well, one interesting about this particular graph that’s worth pointing out, right?

This shows inflation adjusted returns. This is real returns, not nominal ’cause I think it’s powerful and, and the thing that I see and, and it’s not that this pattern will always repeat itself, but I see four periods where real returns were more or less flat for a decade or more, right? So that’s great financial crisis and inflation and great depression, blah, blah, blah.

So from my point of view, it’s something I like talking about is the fact that those kind of periods can happen again. And part of being a stock investor is accepting that fact that it’s happened many times before and it’ll probably happen again. 

[00:09:13] Joe: Well, and this is the problem, Oog, is that Jesse makes a great point that we got these four plateaus on this 130 year.

Uh, a 150 year graph. And yet when you look at the end of all those plateaus, it’s like a boomerang. And think to think about this though, og, how many people gave up before that decade of flat ended? 

[00:09:35] OG: Well, the other thing that’s missing from people that aren’t looking at this is you can kind of picture what this graph looks like, right?

It’s up and into the right from 1870 to present. This is also a logarithmic graph. Mm-hmm. Which means that each level is 10 x higher than the level before. I did not even notice that. ’cause you actually graph it the normal way. You can’t even fit it on the screen because a dollar in 1870, way more up.

Yeah. A dollar and 1870 is worth $31,000 in 2025 after inflation. 

[00:10:03] Joe: Mm-hmm. 

[00:10:04] OG: So, to Jesse’s point, we just don’t use after inflation numbers in our normal parlance. Like when you’re doing your calculations for your retirement plan and you say, you know, I put 10% in my 401k, and at some point in time I’ll have a million dollars in my 401k.

Like, you don’t think like, well actually I have 387,000 in inflation to just, you know what I mean? Like that’s what happens clearly. But that’s not how we really think about it in real life. So it’s an even more profound number. I can’t think back to 1870. I don’t have a lot of memory from back then. 

[00:10:34] Miranda: Are you sure about that?

[00:10:36] OG: Yeah. I mean even the more recent times, like over the, just the last 50 years from the 1970s is even more, to me, even more interesting because we’ve had three really gigantic ends of the world and yet the market is up 50 times over that period of time. It’s 

[00:10:54] Joe: incredible. 

[00:10:55] OG: I was just reading a book about this.

It’s funny that this is the topic, ’cause I was just reading a book about the market fluctuations and that sort of thing, and it quoted, uh, Josh Brown in there from CNBC and Riol and, and the Stacking Benjamin Show and the Stacking Benjamin Show. Obviously, I. He did the calculation and said, if you put a hundred thousand dollars in the market in the s and p in 1970 and you didn’t touch it, you know, and just paid taxes as they were due from some other source, today you’d have 20 million.

That’s, it’s such an incomprehensible number just to do nothing. The other thing that he said, which was I thought really great at the end of last year, he said, any time that you sold in the last 50 years was a bad time to sell. It just doesn’t seem like it in real time. Yeah. 

[00:11:33] Joe: Well, Kiir Kegar, the philosopher, said that life can only be understood backwards.

One of my favorite quotes. Yeah, right. It’s afterwards you go, oh, that’s what I should have done. He was a bright and cheery guy, but we gotta live it forward. So let’s go backwards. I’m gonna start with way, way, way back, and we’ll do two before our trivia competition in the middle of the show and then two after.

Let’s start off with World War I and influenza, and this is what, ah, those were 

[00:11:58] OG: the days. 

[00:12:00] Joe: This is what Morningstar says. After peaking in June, 1911, markets soon started falling due to the breakups of conglomerates like Standard Oil Company and the American Tobacco Company. They were really going after at the time.

This time all the monopolies and the worst part happened when World War I broke out in July, 1914, a $100 investment dropped to as far as $49 and 4 cents. This is looking at, by the way, the index and recovery didn’t happen until 1918. Influenza Pandemic as if the pandemic was like a, I dunno if it was a relief or, I mean, what, oh, thank God.

A pandemic Now where it’s gonna go up. But let’s talk about some of the things that happened then. Let’s talk first about this idea, Jesse, of the breakup of standard oil and American Tobacco. I think we can kind of learn from that, like over the short run. That was a bad thing, but it was also a horrible thing.

If your a concentrated investor, meaning individual stock investors, if you had picked individual companies, you might have taken on the chin way worse than this 50% drop. 

[00:13:02] Jesse: If you’re gonna invest in individual companies, there are so many risks that probably the average person doesn’t even think about or understand.

It’s like that whole, you know, you don’t know what you don’t know and you’re ignorant to what you don’t know. When you hear an actual stock analyst talk about the way they think about a company and the potential risks that that company may face, whether it’s in this case like legislative, like like government stepped in and basically broke this company apart, generally we think about like competitive risks.

You know, like, oh, is Costco gonna get out competed by some other grocery chain? Or we might think about, uh, you know, is Costco overvalued right now? There’s this government risk. You know what if Costco gets hit by an asteroid, I’m kind of making a joke. But it just shows that you have to think about so many things.

So many be a successful investor in an individual company. And uh, unless you’re willing to put in the time and effort and kind of put your own money at risk to do so, there might be a better option for you. 

[00:13:52] Joe: I just think about Enron, Jesse, reportedly what, between four and 10 people knew the thievery that was actually going on at the top.

[00:14:00] Jesse: Yeah, I mean, total right. Fraud risk basically. Right. I was speaking with someone the other day who’s works at Deloitte and we were talking about, ’cause you know, Deloitte, big Four Accounting. Sure. And I think Enron was an Arthur Anderson customer and some of the fellow of the Enron scandal basically means that Arthur Anderson is no more, but just some of the illegal fraud that was going on.

And Yeah, to the outsider, hell, to all the insiders, right? That’s what you just said, Joe. Basically to 99% of the Enron insiders, they didn’t even know there was a fraud going on. So, uh, yeah, you take a lot of risk when you choose to invest in a single company. No doubt about it. 

[00:14:32] Joe: And yet og when we think about those companies about American Tobacco and Standard Oil, I mean the, the companies that rose from those companies later on, don’t get me wrong, over the short term we can see that that created a lot of uncertainty and created a big time market down.

But man, would you look at the companies that then sprang up if you were able to take a longer term view and hang on to some of these new companies that were born? You did very well. 

[00:15:01] OG: Well, I have a much more comfortable history with more recent time, so I’m gonna use that to kind of jump into present, if that’s okay.

Sure. No, no, no. We want to, that also backfired in a different way with like the telecommunications businesses, right? So look at like the big divestiture that was required by, you know, the big at t’s and all that sort of stuff. And you end up with all these other companies and none of ’em are around anymore.

Whereas in the standard oil one, a lot of ’em were around. This just proves the point. I think what Jesse was getting too. It’s very difficult to pick a stock that’s a winner and then also gonna be the stock that’s around for a long time. When I mentioned the 1970s data investing, a hundred thousand, whatever, look at the s and p today and what is dominated by the big seven tech companies.

How many of those were around in 1970? Totally. Totally. None of them were around in 1970, right? Yeah. So the biggest, best companies in the US right now, were not even thought of at that time. And so not only do you have to like try to find the winner, but you have to hope that that winner stays the winner into your entire investing life, or you end up with this Enron situation or at t situation or standard oil situation or Kodak or whatever, where this one event all of a sudden, or in Kodak’s case, right?

A more long term kind of cyclical thing. But my point is, is that it’s very difficult to find the stock that’s gonna win. Then also be the winner for the next 60, 80 years of your investing life. That just, it just, I don’t, I don’t know how many points of evidence you need on this to be broadly diversified.

[00:16:40] Joe: By the way, I love how we mentioned Kodak and the guy in Rochester, New York, smiles, grins. 

[00:16:44] OG: Is there something to do with Rochester? I don’t even know. Painful and long chapter of our history. Yeah. Oh, is it from Rochester? 

[00:16:51] Joe: That may be the home of the company. Go, gee. Yeah. 

[00:16:53] OG: Yeah. I didn’t know that. Ot. Oh yeah.

Well, you wanna know something That’s funny. So my son had a graduation party a couple of, uh, weeks ago. That is funny. And Oh, sorry. So funny. Ha ha ha ha comma Jesse, thank you very much. I’m in mid phrase, Joe, you were there. What was the prop du jour that everybody had at their table? 

[00:17:11] Joe: Oh, it was very cool.

We had those, uh, those little, uh, instant photos. The Polaroid Polaroids that you had. Polaroids had to shake the Polaroids. Yeah. Yeah. That’s 

[00:17:19] Doug: from a different part of New York. It was super 

[00:17:22] Joe: fun. Whatever that might be. Camera 

[00:17:25] Doug: might be a different company. Sweet. Probably a different company, but we’ll just roll with it.

That’s also funny. 

[00:17:30] Joe: Miranda, let’s bring you in on this conversation on a different area. I think another lesson from this, uh, that I didn’t outline, but something that happened here and that is. A lot of the time people go, well, you know what? I don’t need an emergency fund, or I don’t need access to my cash right now, but sometimes the market just stops.

In this case, the New York Stock Exchange, after World War, I began actually shut down for four months. Now, would that happen today? Hell no. That would not happen today. However, this idea, although it did 

[00:17:59] OG: in two th it did for nine 11. It didn’t shut down for four months. It down for a week, not four months, but it shut down for a week.

[00:18:04] Joe: Yeah. For 

[00:18:05] OG: right, 

[00:18:06] Joe: right, right. For so for longer. That’s four months 

[00:18:07] OG: In 2000, one time three years, inflation adjusted, that’s four months Joe Inflation adjusted. Four months, I’m sure it was in terms of trading data and that sort of stuff. Probably way more, right? Yeah. Yeah. For the number of trade. Agreed, so Right.

[00:18:20] Miranda: Volume and everything. Yeah. 

[00:18:21] Joe: Yeah. But this idea that liquidity is guaranteed like it’s just built in, Miranda is also, I think, not true. 

[00:18:27] Miranda: Yeah, and I don’t know whether you’re singling me out because I do keep a portion of my emergency fund in, in, in stock. Oh, there we go. 

[00:18:35] Joe: Oh boy. 

[00:18:35] Miranda: Perfect. But this is a good lesson for me.

This is great. Normally, as far as cash goes, I’ve expanded. I used to, back in the day, I used to keep four to six weeks worth of liquid cash, and then if I needed something for a longer term emergency, then that would give me time to liquidate some of my investments in my taxable investment account. I’ve actually increased that.

I’m up to two months now in my emergency fund and working toward three, just because when we’re starting to think about this and what is liquidity, could we have a long-term sustained issue? Right? We talked earlier, right? Talking about, oh, well, it’s a bad time to sell. Anytime that you sold in the last couple of decades is a bad time to sell.

Well. If you have lost your job or you have some other emergency where you don’t have your income and the market’s down, you don’t have a choice but to sell. Right? If you’re in the middle of your retirement, whatever strategy you’re using to have access to Ready Cash for you, you do not have access. You have to sell while it’s down.

[00:19:31] Joe: Imagine one of these crashes happen, Miranda, and yeah, you need money right now outta your stock portfolio. Yeah, like that is just sucks. 

[00:19:39] Miranda: I mean, I’m still up, like my portfolio overall is still much higher than it was 20 years ago when I started investing. Right? So overall, I’m still up. I’m still actually not selling at a loss.

If you’re going first in, first out, I’m actually still selling with gains, which is also another interesting way to look at this, right? If you’ve been in the market long enough, even when the market is down, your portfolio could still be up. 

[00:20:02] Joe: That’s a good point. Og, you were talking about this a couple weeks ago when you were saying, yeah, now we’re selling it just 18 months ago.

Right? Everybody goes, oh my God, it’s down. Yeah. Okay. It was 18 months ago. It’s not like we were here 16 years ago. We were here a year and a half ago. 

[00:20:16] Miranda: Yeah, so I think part of that is, you know, trying to figure out that perspective. But I have been kind of shifting a bigger emergency fund in cash than I have had in a long time.

’cause I have, I have been using a taxable investment account. I use a taxable investment account for part of my travel fund just because if I do actually have to sell something at a loss, at least now my trip was tax deductible. But, but that’s a very good point. Having liquid cash, especially in times of uncertainty makes a lot of sense because if the stock market is paused and you don’t want to have to liquidate something in this climate, then yeah, you.

Need to have some of that cash available. And 

[00:20:49] Joe: once again, going back to the financial crisis that we had, you know, 2007, 2008, a lot of that credit that you thought was your emergency cash reserve was just gone. Oh yeah, yeah. Let’s go into another one of the top five. We’re gonna do four out of the top five today.

Let’s go to the biggest one. Right? 1929. Everybody always goes back to 1929. The crash in the Great Depression and this Morningstar piece they write, $100 became $21 by May of 1932, about what? Three and a half years later, the crash occurred when the post World War I economic boom, which led to overconfidence, overspending, and overinflation of prices, was eventually no longer sustainable.

When you dig into this og, I mean, there’s a bunch of lessons, but I think this, which is booms and we’ve seen this since then, right? I’m thinking real estate. I’m thinking of the tech rec, I mean things that we’re gonna talk about later. Booms can lead to bubbles. And getting back to that single stock risk man, if you’ve got every dollar in the boom, you gotta be waiting for that other shoe to drop.

[00:21:54] OG: I think a couple of things here about the Rece, um, a great depression, I was gonna say a great recession. Whole different suckiness, same but different. And uh, you know, the minus 80, right, which is basically, or whatever, minus 79 I think from the depression, really kind of mirrored the Y two k.com bust with tech stocks was down about the same.

And I don’t know how much a broadly diversified portfolio would’ve saved your bacon in this. And I, I don’t know that other market data, like international or whatever to say, well, you know, maybe that would’ve helped. But I think it’s a good example of how long it can take to recover and how. This is the price that you pay for averaging 10.

And we throw that number around like very, very easily of like, oh, well, you know, you were, you did it a couple of episodes ago where you’re like, you know, oh, we’re doing the, uh, lets use nine. The Rule 72. Yeah, we’re doing the rule 72. You know, or maybe you’re doing that in a couple episodes. I don’t know where the hell this one’s being recorded in the whole gamut of all the ones we’ve done, maybe it’s coming soon, maybe it’s coming soon, but, you know, you throw, you toss it around like, oh, I got 9%.

Like, well, the price of getting 9% is every so often it goes down by 30 and every, so, so, so often it goes down by 50. That’s just part of the deal. I think the harder part is, at least with the depression, it seemed like it recovered. What, what was the recovery date on the. During the depression. You rattled it off.

Oh boy. Well, well, I just had it hit the bottom in 

[00:23:24] Joe: 1932. 

[00:23:25] OG: Okay. So I think the recovery date was in the mid forties. Right. Hit the bottom. We 

[00:23:29] Joe: had, if we, if we go back to the graph, does somebody still have the graph up? ’cause I got it right here. 

[00:23:34] Miranda: Well, I was gonna say, it said it reached its thing by 1936. Like it’s previous high by 1936, but then it crashed again.

Yeah, I think, 

[00:23:41] Joe: yeah. Then I think Jesse’s got it. 19 45, 5. Yeah. 

[00:23:44] OG: Yeah. So the first recovery, 1936 in World War ii, obviously. So maybe those are two separate events are somewhat intertwined. I, I, I suppose, which I think maybe is another lesson even, I know you wanted to skip over the World War II one job, but that’s another thing.

Just ’cause you’re out of the woods of this one doesn’t mean the next one’s not around the corner. 

[00:23:59] Joe: Yeah, good 

[00:23:59] OG: point. How about the people in 1936 that are like, oh, thank God I stayed invested. You know, my planner kept me diversified. I, I’m back to even money. And, uh, what, what’s happening in Germany? Who’s this guy?

What’s, what’s he wanna do? Oh, and just imagine that’s gonna affect us. Imagine 

[00:24:15] Joe: 1929 to 1945. I mean, there’s another thing right there, Jesse. I mean, this role of patients and continually investing, because if you continually were able somehow to keep dollar cost averaging through both of these pits, it’s great depression and, uh, world War ii, man, you, you probably cleaned up, 

[00:24:34] Jesse: right?

If you could stay the course, right? I mean, totally. You, you hit the nail on the head, Joe, and we all kind of are, and, and I’m, I’m fast forwarding to the end of the article only ’cause this one line is about the Great Depression and we’re talking about it right here. It says, there’s no way to know in the moment whether you’re encountering a minor correction or looking down the barrel of the next Great Depression.

Still, even if you are looking down the barrel of the next Great Depression history shows us that eventually the market recovers. And it’s like, that’s fair. I. But it, it’s really hard to express to someone, especially if you’re just writing it on a page. How do you express to someone it recovers in 16 years?

Like 16 years is a long time. 

[00:25:11] Joe: I got good news and bad news. Yeah. 16 years 

[00:25:14] Jesse: ago I was walking across a, a high school graduation stage. That’s what 16 years is to me. It’s, it’s so long. So that’s ridiculous. That’s the really hard part about, yeah. How do you guys feel now? Nice. Flex. Yeah. Jesse’s a 

[00:25:25] Miranda: old baby. I know.

[00:25:27] OG: Oh, 16 whole years ago, you know, life was really challenging. Jesse, this is one of the things that, I’m sure you talk about it with your clients as well, especially when it gets to the concentration piece around tech. I love having this stat at my disposal because it, it mirrors the tech crash in, in 2000, NASDAQ hit its all time high in March of 2000, then went down, it also went down 79% and it recovered in August of 2013.

Yeah. And so everybody who says from an investing standpoint, oh my gosh, you know, no, you don’t understand. We don’t do value stocks anymore. You know, we have to only be in tech. It’s like we’ve sung this song before and I can tell you how the chorus goes. It goes like in 2038, your even money. Tell me that between now and 2038 with 80% of your freaking money gone, you’re gonna go, yeah, yeah.

Dollar cost average. Yep. Stay the course. Stay the course. Like no one does that. Not even the most stalwart person would do it. It’s very hard to be single, single stock, single technology, single theory investing, and not have it blow up in your lap. And this 

[00:26:33] Miranda: is why I index. 

[00:26:34] OG: Yeah. Yes, exactly. I’m too lazy.

Lazy. 

[00:26:36] Miranda: And it’s too stressful to not, this is exactly 

[00:26:38] Joe: right. Miranda, that is a great lesson from this aside side one. Jesse, you were gonna say something? 

[00:26:43] Jesse: I was just gonna say that was a catchier chorus than I thought you’d be able to pull off Josh with your metaphor. You know, in 2038, even money Hard Rock, og, you know, it was like, it 

[00:26:54] OG: was like November rain.

Like that’s how I have envisioned in my brain. Like it’s like a ballad. Alright, can we talk one, 

[00:27:00] Joe: just one more thing briefly. ’cause I’d be remiss if we didn’t do this before the break. Uh, ’cause I really wanna move up the timeline here, but this idea in 1929 also of leverage, Jesse. The 1929 crash came about because people were leveraged to the hilt.

They were so exuberant. They’re betting the farm literally. Leverage is awesome in an upmarket, but even in real estate, Josh Dork and the creator of BiggerPockets said to me once, he’s like, leverage in real estate. You saw in 2008 was this giant toilet flushing as you got all the morons out of the market that didn’t have a plan.

[00:27:33] Jesse: Yeah. You guys know what, uh, Warren Buffet calls leverage. He calls it a financial weapon of mass destruction. Oh wow. Right. And that’s totally what it is. And there’s this great, I’ll see if I can find it and then provide it to you, Joe, and then maybe we can share it with the stackers. There’s this amazing letter that I think Warren Buffet wrote to like the SEC in the seventies or eighties when options trading was like exploding.

’cause options trading a, a lot of options, trading is just like leveraged by another name. It, it allows you to put some five to one or 10 to one bet on a particular stock or something like that. Buffett was basically saying like, you are encouraging just this, it, it, it’s kind of like the Great Depression 2.0 is what he was saying is where you just have this, you’re gonna have this rampant leverage in the system.

And this other great metaphor is, uh, when that all unwinds, it’s like a crowded theater with a small door. Oh. And you just have this rush for the exit and, and the metaphor’s kind of cool. It’s very scary, but it’s kind of cool because then you say, well, how do you get to the front of the line if you’re in a crowded theater with a really small door?

And in the marketplace, the answer is you offer a lower price. You offer a lower price that hoping that someone will buy it from you, buy your assets from you so you can get to the front of the line and that is that toilet flushing that all of a sudden just the bottom drops out of a market and you have this gigantic crash out of nowhere.

So, uh, that’s the risk of leverage and uh, anyway, it’s something we all probably need to be aware of. ’cause it exists in the market even if we’re not participating in it. Right. We have to keep that in mind. 

[00:28:58] Joe: It’s a great metaphor. I love that. The only way to move up is, uh, put your stuff up for sale. Right.

I like fire sale. Yeah, right. I was gonna say start off with garage sale estate sale. Out on your front lawn for free The way, good news about the Great Depression. Didn’t think I’d ever say that line, but there was some good news when we look back historically, which is we got the Securities and Exchange Commission.

So we were able to, to take some of the, you know, everybody loves 

[00:29:22] OG: the government, 

[00:29:22] Joe: the stuff we got, FDIC, which saved a lot of people’s bacon. And it also birthed this idea, Miranda, that we were talking about earlier of emergency fund, right? That because all of a sudden people are like, I need a safety net.

I can’t have everything there. So I think that, um, all these systems we’re talking about were built on like yesterday’s mistakes. And so luckily we’ve got those in place. We’re gonna talk next about the Vietnam era and that brutal 1970s with Watergate. And then we’re gonna go to the lost decade, which started off with the.com crash and then ended with real estate crisis.

Lots of fun today and up, but Doug also has a history lesson here at at the middle of the show. And if you’re brand new to the Stacky Benjamin Show, we do trivia in the middle of every episode. But on Fridays it’s special because our participants in the round table are also taking part in the year long competition.

It is our three frequent contributors, OG Jesse and Paula Pant. And so Miranda, today you are team Paula, and that means, oh, no, speaking. Speaking of good news and bad news, Paula and I are supposed to 

[00:30:28] Miranda: be friends. 

[00:30:30] Joe: Well, the good news, Miranda, is you can’t do worse because Paula as usual is in last place. 

[00:30:34] Miranda: Oh, good.

Thank goodness that takes the 

[00:30:36] Joe: pressure off it. Totally. There is nothing to worry about here, Miranda. Paula has the least points. Jesse’s in second. OG is in first, which means you get to guess. Last Jesse guesses in the middle. OGs gonna kick it off, but just to lead in, Doug, what is the score in the competition so far?

Well, Joe, 

[00:30:54] Doug: we have OG with eight points. Jesse with five and a half. And Paula pulling up the rear with four and a half. 

[00:31:01] Joe: There it is. Alright, so, uh, Miranda, you can help Paula move outta last place and tie Jesse or Jesse you can finally get, get back. It’s the two of those points that Doc G got last week for who, who knew by the way, og that we would have the other G, doc G who’s horrible at trivia and horrible at game shows.

Come on. And this dude gets two points for you. 

[00:31:28] OG: Well, I was, I was on his phone. I was texting him while the, while the game show was going on to give him the answers. 

[00:31:33] Miranda: Yeah, I’m gonna say something that’s probably gonna cause problems now because, um, I am in fact a trivia host. 

[00:31:38] OG: You are a trivia host 

[00:31:39] Miranda: and, and a trivia champion.

So now when I go down hard, um, 

[00:31:44] Doug: it’s gonna look even worse. You haven’t heard trivia like this before Miranda? I, 

[00:31:48] Joe: Miranda said our trivia, she’s like, there’s been trivia. I 

[00:31:50] Miranda: played your trivia. I know. And then there’s 

[00:31:52] Joe: Stacking Benjamins trivia, which is a whole different thing on Monday, Wednesday. It’s Getable on Friday.

Well, Doug, you’re celebrating another moment in history. Let’s, uh, let’s stay in the 1920s, shall we?

[00:32:07] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug and longtime listeners know I love saving a dollar. Listen to some of my greatest hits. Number one, I only film my gas tank in the morning when it’s cooler, so the fuel is more denser, more dense. It’s dense. Okay, sure. It’s only Jesse’s 

[00:32:24] Joe: an engineer. He understands that it 

[00:32:26] Doug: only saves a fraction of a penny every fill up, but I mean, like over 50 years it adds up.

It adds up. And number two, I don’t buy luggage. It just wear all of my clothes on the plane. Sure. I look kinda like Michelin man going through DSA and the people in the next seat aren’t super comfortable with how much I sweat. But hey, 35 bucks is 35 bucks. I’m a savings ninja. Well, not even Doug. Thought of the amazing hack people were deploying to save money before today’s date in 1920.

That’s the day the US Post Office finally said that children could no longer be sent through the mail.

God, those were the golden days and used to be able to do that, wasn’t it? I’m not making this up people. Here’s today’s question. Before that ruling, what was the maximum weight your Husky Tubby child could be and the post office would still send them? I’ll be back right after anybody else here wear huskies as a kid.

I’ll be back right after. I try to Venmo myself from the past. If I can get some compound interest, like in reverse, I’m gonna be rich. 

[00:33:35] Joe: Oh, wow. I can’t wait to see how that plan unfolds. This might be the most bizarre trivia we’ve ever done. So og, let’s say it’s 1920, you’re mailing your kid, or it’s 19. 19, you’re mailing your kid.

What’s the maximum weight the post office would allow for that to occur? 

[00:33:53] OG: Okay, so let’s assume if you were 12 you could probably get your own train ticket or horse ride or something. So this is gonna be a reserved for just the, just the smallest, littlest kids. The ones who couldn’t argue, I mean, they were working at 12, right?

So these are six year olds. 

[00:34:13] Doug: I don’t wanna go. 

[00:34:15] OG: Yeah, you’re going to grandma’s for the summer? No, not the post office. And if they could play too much, you put the stamp right 

[00:34:20] Joe: over their mouth. 

[00:34:22] OG: Yeah. Yeah. I’m gonna say that it was, um, the maximum weight was 45 pounds. 45. 

[00:34:31] Joe: Oh, Jesse doesn’t like that. Jesse, you’re up next man.

[00:34:36] Miranda: You’re on mute, buddy. 

[00:34:37] Jesse: Thank God. Sorry, buddies. I was thinking about, uh, Doug’s cold gas tank and, uh, as the day heats up, just the pressure building inside that so that Doug can save a penny. Uh, but no, I, I like OGs theory ’cause okay. Our daughter is one and she’s like 25 pounds, and I don’t think the number is that low because the idea of the post office signing up to mail like 1-year-old children just doesn’t make sense logistically.

So like, og it’s like four year olds and five year olds and that kind of thing. I’m gonna go with 60 though. 60 pounds is what? I’ll say 60 

[00:35:15] Joe: pounds. So Miranda, we got 45, we got 60. 

[00:35:20] Miranda: My guess is it’s, it’s increments of tens, but I think 60 is too high and I’m gonna go with 50, I think. Because when you’re talking back in the day, right, you got male going by coach and four or five, six year olds, seven year olds, those kids.

You could send ’em on a coach. You can, you can get ’em a train ticket at that young age, like when you’re talking of the 1920s, like childhood as we think of it, didn’t really exist. Four people. Yeah. But still people you’re thinking 

[00:35:43] Joe: about, like Jesse said, mail in your 2-year-old. 

[00:35:46] Miranda: Yeah, but they’re not going through the mail.

Right. They’re getting put on a train and then some, you know, creditable US Postal Service employees carrying them about, I’m gonna say 50 pounds because it’s gotta be something that a postal service carrier can just like, put on their hip and just like go around. I’m gonna say 50 pounds, like right when you’re, you’ve got a thing that says, must be able to lift 50 pounds.

That’s the thing I’m gonna say 50 pounds. 

[00:36:08] Joe: 50 pounds. All right guys, we got 45. We got 50. We got 60. Doug at the door. Don’t Chelsea, Brendan, everybody playing nice today? I don’t know what’s up with that, but, uh, we’re gonna find out who’s closest in just a moment. Og, you started this, uh, shindig at 45 pounds in both, uh, Jesse and Miranda said they think you’re a little low.

What are you thinking? 

[00:36:29] OG: I just picked a number. Um, I never thought about mailing my children, so I can’t, uh, 

[00:36:36] Joe: oh, I’ve, I had days back in the day, Jesse, you said 60 pounds. ’cause you couldn’t imagine it being much lower. 

[00:36:43] Jesse: Yeah. And that I couldn’t imagine it being much lower than OGs guess so I said I want to give some space that’s, you know, some tactics come into play, right?

Mm-hmm. I didn’t wanna go 46 ’cause then Miranda could just sandwich me and by guessing 47. So I had to give enough space to encourage the field goal. Which Miranda you bit, uh, but maybe you’ll end up 

[00:37:04] Joe: being right. Maybe you’ll end up being right. I don’t know. Miranda, you feeling good? 

[00:37:09] Miranda: I’m feeling pretty.

Okay. ’cause I’m just thinking in terms of like. When is a child walking? What, what are you gonna be carrying? Right? A 60 pound child, most 60 pound children can walk. You don’t need to be able to carry them. So I think that’s too much. 

[00:37:20] Joe: Mm-hmm. Doug weighs nearly 60 pounds now. You’re getting there, aren’t you?

I weighed nearly 60 pounds when I was born. 

[00:37:27] Miranda: I was too bad of terms of the fact that, you know, I, I raised a whole human, I did this once. 

[00:37:33] Joe: That’s right. That’s right. We have one mother and two dads who are, uh, who are guessing here. Let’s see if the mom gets it or one of the two dads gets it, Doug. Who’s gonna win this thing?

[00:37:46] Doug: Well, hey there Stackers. I’m Venmo lover and guy who no longer believes in time travel. Joe’s mom’s neighbor, Doug. Today’s question was about mailing children, which can save you a ton of money. But a last, that service was decommissioned on today’s day back in 1920. I do have some other hacks you can borrow, though.

First, you know how expensive hair dryers are these days. I’ve reverse engineered the hand dryer at the gas station to blow dry my hair. Instant savings in the 32nd limit, please. I’ve been training for this, and how about this one? Nobody yet has figured out the huge cost of birthday candles, especially for a guy as old as Joe.

Well, I did. I did. Right here, right here, you can get hundreds of uses out of a single candle by blowing out all the candles for the birthday Boy, before we finish that stupid song, I mean, we all know how it ends by now, right? Light ’em, blow ’em out, move on. You’re welcome. But let’s get today’s trivia answer, shall we?

What’s the maximum weight ankle biter the post office would send for you before banning the practice? Well, I’ll tell you this. It was 10 pounds less than what Jesse guessed, and five pounds more than what? OG guessed. Wow. Meaning Mah. That’s the new name for Miranda slash Pola. Mah has nailed it right on the head.

[00:39:03] Joe: Miranda, do I get extra points? Right on. Bam. No, you get a high five right there. Nice job. I didn’t think about the fact I was bringing on the trivia champ, but I knew that you’re a trivia host Miranda. That’s gotta be a fun thing to do by the way. 

[00:39:18] Miranda: It’s so, I have two side gigs now in real life. Uh, trivia host and bartender twice a month for bottomless mimosa day on Sunday.

She 

[00:39:26] Joe: should have been bartender for this round table, right? 

[00:39:30] Miranda: And between those two things now that pays for all of my entertainment and booze for the month. Perfect. Fabulous. Perfect. 

[00:39:36] Joe: It’s as if you dreamed it. There was a lot of strategery there. Yeah. Alright. And that means Paula now tied with Jesse and the coalition, Jesse, is back in action.

Here we go. I love 

[00:39:47] Miranda: you, Paula. 

[00:39:49] Joe: Alright, let’s go to the second half of this discussion. And as I mentioned, if you want to talk about the World War II era and all of the lessons there, go read this piece. We’ll link to it on our show notes, but we’re gonna go to inflation, Vietnam and Watergate. The Morningstar piece reads 1973, middle Eastern members of OPEC imposed at oil embargo on the us, which led to severe inflation on top of Vietnam withdrawal and political uncertainty.

After Watergate, uh, there was a 51.9% stock market gain, which would’ve brought a a hundred dollars investment down to $48 and 13 cents, and it took again, like these other ones more than nine years to recover. This is a time og when I think about this. You know, up until just a couple years ago, if you said inflation, nobody was paying attention, right?

Mm-hmm. I mean, before the pandemic, like, what’s inflation? And then all of a sudden now inflation’s not everybody’s mind, but truly, when you think about inflation, I. A big lesson from the 1970s, because even when you got back to a hundred bucks, your a hundred dollars was no longer worth anywhere near a hundred bucks nine years later, 

[00:40:53] OG: right?

So the only place that you can invest to keep up with inflation is in the actual products that are causing the inflation. So you have to own the companies that are causing the inflation. When you get back to even money and you’re like, it’s been 10 years and I’m still in the hole, it eventually will catch up again.

Even with a huge inflationary period in the seventies, even with a pretty large inflationary period in 20 21, 22 ish, 23 ish time recently, we still are pretty comfortable with saying the average inflation is three to 4% a year. So there’s periods of time where it’s gonna be really high inflation time, and really low inflation time, and really high stock market growth and really low stock market growth or negative, you know?

So those things just come and go and from a cycle standpoint. The only thing that matters is from an investment perspective, what are your investment choices during those different types of cycles? And the reality is, is that the only thing you can invest in that keeps up with inflation is the thing that’s causing the inflation.

You have to be the owner of those things. That sounds really grotesque to say, you know, I’m owning the thing that’s causing the problem. But yeah, I mean you’re not, it’s like a flotation device though, the way I think about it. Yeah, kind of. You are, you’re not, but you know what I 

[00:42:10] Joe: mean. It totally, it’s like a flotation device.

Miranda, this is where I want to turn to you because, oh my goodness, did we have headlines during this period? I mean, we’ve got the Vietnam withdrawal, we’ve got Watergate, Nixon stepping down, and then the PEC stuff. And then, you know, in the late nineties when we’re finally pulling out of this, we’ve got the crisis with the hostages and Iran.

I mean, we’ve got all of these headline after headline after headline through this period. This is why I think something you said earlier really works for me. This is why your like by the index, forget the headline. 

[00:42:43] Miranda: Yeah, I mean really like, I mean you look today, right? I just went ahead and pull up Market Watch today and the Dow is down again.

I mean, it’s still up on, yeah, sure. I don’t know, whatever man. But it’s been very volatile this year, January 20th. It’s been extremely volatile. The stock market has, every day you’ve got somebody going sell before this big announcement, oh no, buy the dip, do this. It’s very, it’s very stressful. And so I’m a big fan of staying the course.

I actually had, I made a little, it was just like a really short video ’cause I had somebody message me and say like, what do you recommend to do with stocks right now with all these headlines and the stock market volatility? What do I do? And I wrote back, I said, you, you stick to your plan. Keep staying the course.

Because over time, and we’ve seen on the chart, you know, it recovers and our entire system is set up for it to recover. Like that’s what we focus on in our system and our society. We focus on making sure that eventually the stock market recovers. And you’re doing that Miranda buying the 

[00:43:40] Joe: things to OGs point that caused the problem.

[00:43:41] Miranda: Yeah. And so it’s like, okay, so just if you’re a dollar cost averaging and you have a plan, keep that up. If you’re a little bit concerned about like, okay, I need a little more liquidity in my li my life, okay, fine. Maybe you pull back on and only invest about half of what you’ve been, you know, like if you’re dollar cost averaging, if you’re feeling uncomfortable about it, sure.

Say, okay, I wanna build some of my cash reserves a little bit and will reduce what I’m putting in the stock market, but keep staying the course. Keep that dollar at cost averaging going because you know, the lesson we’ve learned through all of this is if you had just stuck in the market from the seventies on your money.

$20 million, right? Yeah. Holy cow. Stick to your plan. Yeah, and I’ve become kind of a little bit of a financial nihilist at this point because I’m like, it’s either gonna be fine and we’re gonna work it out and it’ll be fine or it’s not. And like I said earlier, money, whatever that means, whatever money means to us isn’t gonna mean the same thing.

[00:44:31] Joe: I’ve always had that point of view. It’s either gonna, the economy’s gonna you, you have to make one bet in our system, and that’s that the economy’s gonna continue. And if you believe that, then you’re good. 

[00:44:40] Miranda: Yeah. And if it doesn’t continue, well then it doesn’t matter how much you have in cash or stocks or wherever, because none of it’s gonna matter.

[00:44:49] Joe: Jesse, I think another lesson from this is in how you create your financial plan. You know, you and I have seen some young fire advocates that are using some numbers just based on like the last 15 years. That truly as an older guy are just, is just ridiculous. And all you gotta do is look back at this period in the seventies to go, maybe you need to rethink this huge withdrawal rate you’re contemplating.

Maybe you need to forget about the 12% return that Dave Ramsey says he’s going, he’s gonna help you get, I feel like the seventies is proof that the assumptions you put in your plan are super important. 

[00:45:24] Jesse: A hundred percent. And it’s the cool lesson from the seventies, or the Great Depression or the Silver litigation, what was it called earlier that I’ve heard too?

Agitation. The cool lesson. Silver Agitation. Yeah. The cool lesson from this Morningstar article is the fact that sure, if you’re thinking about a 30 or 40 or 50 year period, you kind of get this broad scope that you get to look at. But especially for the early years in our retirement, like we know there’s this sequence of returns risk that can crop up at the worst time, which is usually the beginning of your retirement.

And if you don’t really have a, that as part of your plan, how you’re gonna deal with that sequence of returns risk. And if you’re depending on the market to continue growing at 12%, like you just said, Joe, and if you’re depending on inflation to remain low, and if that’s the thing that has to happen at the beginning of your retirement to lead to success, you might be setting yourself up for trouble.

And you should plan for this idea of, you know, what if the 1970s were to repeat itself? What if the lost decade were to repeat itself at the beginning of my retirement plan? How do I get through in that case? And if you can’t get through, you might wanna readjust. 

[00:46:27] Joe: We covered a lot of the lessons from this last period I wanna talk about, but there still are a couple looming.

And this is what they call the lost decade in this piece, and they take two bus and put them together, the.com bust and the global financial crisis, kinda like the field goal at the ends of this 10 year period or longer, 13 year period, really, the Morningstar piece says the.com bust began when over inflated prices and internet and technology companies hit a breaking point, losing nearly all the gains.

They previously made a hundred dollars investment in the August of 2000 with a decline in value to $52 and 76 cents. That’s invested in SP 500. Seven years later, the stock market had almost gotten back to its previous level, 95, 25 when the housing bubble burst and mortgage, mortgage-backed securities began experiencing losses leading to the great recession in which the investment declined in value back to 46 bucks.

Altogether, this 12 year period included a 54%. Decline. The thing I find interesting about this one, OG, is we start off with this run up in the late nineties, right? You gotta get in the internet, everybody’s gotta get in the internet. And what did we do when the internet blew up? We went to the thing we thought was the safest place we could be real estate.

’cause they ain’t making more real estate. So it doesn’t seem to me to be farfetched to think that these two blew up. Boom one and then the other one, 

[00:47:49] OG: there’s always some sort of apocalypse, you know, du jour. There’s always gonna be some area that is overbought, oversold, I don’t even know the right terminology, but something that’s gonna be too much.

And just like you said, Jesse, about Warren Buffet saying that the only way to get a price sometimes is to be the lowest price. So that hopefully you can get rid of your stuff. And that sometimes there is no price that’s too high a price to pay for things. And we see that, you know, in our major metro area as it relates to housing, generally speaking, it’s.

We’re somewhat immune to it. I, I feel kind of weird because people say like, oh yeah, housing, housing market really, you know, sucks right now. And I’m like, where? Not here? Like, my neighbor sell their house in two days for 10% over asking, like, done. It’s not even, you know, like, did you hear that house? It was on the market for seven whole days.

Oh my gosh. What’s wrong with it? What’s, what’s wrong with it? It’s a whole week. Yeah. Sat there for the whole week. You know, the chickens come home to roost here too, eventually. I suppose so. I mean, I, I think the overarching theory, you know, theory, the overarching lesson out of all this stuff is you can’t predict or control when markets are gonna do whatever they’re gonna do.

You certainly don’t have any crystal ball. No one does to know that today’s the high watermark or tomorrow’s the lowest point and you should act accordingly. And you can’t predict not only when it’s gonna happen, but to what stuff it’s gonna happen to. So your only defense is to own everything all the time and just.

Keep it that way. Just, just own one of everything. It’s just too easy to just say, well, I don’t have to play the game like Miranda said, I don’t, I don’t wanna, I don’t, I don’t take too much bandwidth. I like, I’d rather do trivia or do whatever. Right. It just takes too much bandwidth to just own one of everything for all eternity.

I’m know wine 

[00:49:39] Miranda: to drink kids, 

[00:49:41] OG: you’re not wrong, sister preach. Yep. So, you know. Just choose the simple path. 

[00:49:47] Joe: I think this was Miranda, a period where I think we learned that volatility fatigue is a real thing because I just think back and you’re like, oh, okay, I’m gonna buy the dip. Like if you thought you were smart and you bought the dip in 2002, goes up for a little bit and then damn it, we’re almost back to normal and we get another dip.

Like I could see people learning the wrong thing if you’re gonna always try to buy the dip. 

[00:50:09] Miranda: Yeah. And it’s just, you don’t know, okay, well is this what happens if the dip is worse the next day? 

[00:50:15] OG: What if there’s a dippy dip? Oh no. 

[00:50:16] Miranda: Yeah, exactly. We could have a dip, double dip, dip, dip, 

[00:50:20] OG: dip, dip, a triple 

[00:50:21] Joe: dip, who knows?

Like an ice cream dips 

[00:50:22] Miranda: for days. And 

[00:50:23] Joe: so is this where double dipping is actually appropriate? 

[00:50:26] Miranda: Oh my gosh. Well no, because you already spent all your money on the first dip and now you don’t have any money for the second dip that’s already dip money. 

[00:50:32] Joe: Good point. Like the truck has backed up. It’s already been backed up.

Jesse, let’s go around the horn and talk about some of the just lessons from all of these. What’s kind of an overarching lesson you got reading this piece that I think is good for us to end on? 

[00:50:47] Jesse: Yeah, the overarching, okay. Going back to the beginning, the up and to the right trend is impossible to ignore.

And that is like, I think the first trend that many stock investors have internalized. And if you haven’t, it behooves you to internalize that lesson. But then the second one, my second big takeaway that even in this last discussion of the great financial crisis and, and going back to the Great Depression, it’s, it’s hard to put into words what it was like to live through or invest through those times.

It’s hard to say like, oh, just wait 16 years and you’ll be back above water. Right. And it’s not just your stock portfolio. ’cause that’s the really, you know, great depression. It was unemployment too. So your cashflow no longer exists and your portfolio is down for the people who invested then that’s a tough one.

’cause like maybe it doesn’t apply that much to modern day, but the great financial crisis, if you might lose your home. You also lost your job and your 401k is down 50% at the same time. Like that is really hard to deal with. And it’s hard. I mean, I’m not even sure I can fully empathize and put myself in that position.

[00:51:49] Joe: Well, and for some people, Jesse, it was even deeper. People lost. Smart people lost jobs. They lost their homes. Totally. 

[00:51:54] Jesse: Yeah. So that’s what we’re talking about here. So it can really happen and it can take a little while to recover from that. And so I think from that kind of holistic financial planning point of view, that’s my big takeaway is to realize that this is more than just, oh, my portfolio went down.

I should buy the dip. It’ll recover in a year. Like it’s more than that. And, and we need to open our eyes to that fact. 

[00:52:16] Joe: Miranda put an and on the end of that, and we should have also learned this. 

[00:52:21] Miranda: Well, yeah, I mean, so the course, and I think Jesse makes a really good point because we talk a lot about, oh, we’ll keep it in the market.

Don’t panic, don’t sell. But I think it is important to recognize some of those things that Jesse brought up, which are, what happens if it all comes down at once and you have no choice but to sell? How do you prepare for that? How do you get ready for that? Because you can have like a year long emergency fund like all of us tell you to do, but if this lasts, if something happens like the Great Depression and it lasts more than a year and you’ve gone through everything and now the stock market’s been shut down, well now you can’t even sell what you’ve got left.

So it is something to think about kind of at the risk of sounding all doomsday prepper and like I grew up in a religion that has an end times. Theology. Um, don’t forget, you know, it makes sense to like prepare a little. Right. Like I said, you know, I, I can hunt, I can fish. My family has food storage. So what was 

[00:53:17] Joe: your address?

That’s our lesson, Doug. Our lesson is everybody should 

[00:53:19] Miranda: take up fishing. Which is, which is what? 

[00:53:22] OG: Which is to Miranda’s house. 

[00:53:24] Joe: Yeah, that’s right. It’s 

[00:53:25] Miranda: come find me. I know how to hunt morals. And now it’s moral season guys. It’s moral season. Oh, 

[00:53:31] OG: yummy. Doug doesn’t have any morals. 

[00:53:33] Miranda: We’ll have huckleberry season in a couple months.

[00:53:35] Joe: It’s great. I love, I used to go up close to where Doug lives, Morell mushroom hunting. 

[00:53:38] Miranda: Yeah. 

[00:53:39] Joe: Just go walk through the woods. Good stuff. And, 

[00:53:41] Miranda: and I’m just gonna add one more thing too. It also means preparing like where are you at in your community? Where are you at with your resources? Do you have community that you can rely on community networks that you can turn to?

Because if you think that it really is going to be a long-term issue, right? Like, you know, if you feel like, oh, I am at risk if everything goes to crap, if we have another great depression and I can’t get a job and I deplete my savings and I lose my house and everything’s, you know, whatever. What are the other resources do I have to rely on?

What are my personal networks? 

[00:54:11] Joe: Well, and this is what’s cool ’cause Miranda, we’ve known each other for a long time. Yeah. And the fact that you have these side hustles when frankly knowing a a little bit about you, you don’t quote need them. No. But to be able to go out and do these other things and create income is a huge skill that if the market’s down for 16 years, the ability to go back and turn and do something else, I think is a big thing.

Let’s get OGs before we say. Goodbye, og. What’s another takeaway? Big overarching takeaway from this. I, 

[00:54:36] OG: I had my big overarching takeaway. I had my moment earlier, I’m out of ideas. 

[00:54:44] Joe: You just go ta ta. And that that overarching takeaway was be diversified. Diversify, 

[00:54:51] OG: yeah. Diversification, you know, not the day nor the hour.

Mm-hmm. So, own one of everything forever. 

[00:54:58] Joe: I just wanna say, you know, as long as you can just, this graph also makes a great, great, great chart about why that automatic investment plan, not just diversification, but that automatically putting the same amount in every month really, really helps, like, wow. Yeah, 

[00:55:13] Jesse: that’s a really good point, Joe.

’cause this chart, again, this shows the $1 invested in 1870, and then it just shows the value of that $1 inflation adjusted over time. If they could recreate this chart and say, put in one more dollar every year, or like inflation adjusted, you know, almost like turn it into a DCA chart. Those long periods of no return, that 16 year period where you’re like, oh, shit.

That period fundamentally changes if you’re dollar cost averaging through it. And I think that’d be a really powerful chart to, uh, yeah, to make. So, Morningstar, Morningstar, if you’re listening, there it is. You’re here first. Your next assignment, when we get you next 

[00:55:48] Joe: time at Morningstar, we’ll talk to our friend Christine over there.

All right, everybody that’s gonna do it for today. I love walking through history. I loved every minute of this episode. Thank you so much for hanging out with us stackers. Let’s find out what’s going on, where you all are. Um, we’ll have our guest of honor go last, uh, og, what’s going on this fine weekend in the middle of June.

[00:56:07] OG: Oh, packed tomorrow is couples golf tournament, so, uh, really look forward to that. The wife played pretty good in her last golf tournament, so, uh, we’re gonna kinda, we’re, I think we’re, we’ll see what happens. Uh, so optimistic about that. And then the 15th on Sunday is our 20 and. Third, 23rd wedding anniversary.

Wow. Congratulations. So, uh, congratulations. Absolutely nothing because 23rd is nothing. 

[00:56:34] Joe: It’s nothing. So that means we do nothing. Exactly. That’s great. Well, the fact that she’s put up with you for that long is just a testament to longevity. Being able to stick with it, stick with it. Stick to Itness. Jesse Kramer, what’s going on at the Personal Finance for Long-Term Investors Podcast.

[00:56:50] Jesse: Well, I think first off, I think, right, so for every anniversary there’s a gift and I think 23rd is lead. So maybe some pellets or some, uh, pre 1974 paint chips OG could be a really nice gift. 

[00:57:02] Joe: Maybe 

[00:57:03] Jesse: some fluctuating silver. Get 

[00:57:04] Miranda: some ammo for your gun, ammo for your gut. 

[00:57:08] Jesse: Some agitated silver. Be wonderful.

23rd as, uh, uh, anniversary gift. Saving all my money for my 25th. Last weekend we celebrated, uh, our daughter’s first birthday, so that’s pretty exciting. Woo-hoo. Uh, on the podcast though, last week we had our seventh a MA episode, and next week we have a fun episode featuring. Six celebrities, including Joe to tell us some fun spending stories.

I’m calling it the Keeping Up with the Joneses episode. So we have some really cool spending stories. Am mine not on this episode? 

[00:57:40] Joe: That is true. If you really want spending, we should have, I should have deferred to o Holy 

[00:57:43] OG: crap. 

[00:57:45] Joe: He’s like, here, hold my beer. 

[00:57:48] OG: Do you wanna know what I, so while we were talking, I had to jump on chat GBT real quick and I wrote, here’s my spending plan for the next month.

What is my optimal credit card strategy for points and chat? GBT gave me a big, long list of how best to allocate my spend for the next month on my credit cards chat. JBT said, cut up the cards. OG it said, Hey knucklehead, weren’t you just talking about investing in dollar cost averaging? Why don’t you save a few bucks?

[00:58:14] Joe: What the heck’s going on there? And I love Jesse, some of the love you’ve been getting from our stackers in Mom’s basement, but they also said they’ve had a little trouble finding the show. So if somebody’s having trouble finding the show you, you are encouraging like don’t give up. Your show exists. 

[00:58:29] Jesse: Yeah, it does.

And so here’s the funny thing, it exists on all podcasting platforms as far as we’re aware. The specific platform in question in the basement was, uh, pocket casts. And the funny thing is Pocket casts syndicates directly from Apple. So as long as you’re on Apple, which is the strongest platform for me, then we’re on pocket casts.

That said, indef defense of the stackers, I know they’re onto something. ’cause three unique people are like, yeah, Jesse, we can’t find you on pocket casts So clearly. If it was one stacker, no offense Joe, I’d be like, okay, this, this person doesn’t know what’s going on. But the fact that it’s three means like, okay, there’s only like a 50 50 chance that three people don’t know what’s going on.

No, I’m kidding. No, I’m kidding. Uh, but something’s going on there. But still, thank you for searching. Definitely on Apple, Spotify, all the big ones and we should be on a lot of the small ones too. 

[00:59:14] Joe: That is good to hear that you are out there. So stackers, keep on looking for personal finance podcasts for long-term investors.

Miranda, great seeing you again. It’s been so fun. No, thanks for having me on. It’s been a minute. Well, so, so everybody goes to miranda marqui.com and Miranda marquette.gumroad.com. Oh gosh. And they will find, uh, some of your mini courses. 

[00:59:35] Miranda: Yeah. Yeah. So just head on over there and you can access the mini courses.

I do have a couple seasons of a podcast I did with Sarah Lee Kane called, it doesn’t Make Sense, make sense, and that sense with, you know, a c because we’re so clever. But, 

[00:59:47] Joe: uh, my first show in Detroit was called Dollars and Cents. Yeah, 

[00:59:51] Miranda: yeah. 

[00:59:52] Joe: SE Yeah. And s se ha ha. And it’s kind 

[00:59:55] Miranda: of fun. We just did a couple, uh, seasons of that and then we had some life stuff, so we’re just kind of, we’re on Heys for a minute, but like, it was kind of a fun thing to just take regular personal finance advice and just be like, okay, well how can you do it different?

But this weekend, uh, I get to do politics and then we’re having a graduation party for my son. 

[01:00:11] Joe: Wow. 

[01:00:12] Miranda: Congratulations. And, and this is his associates, not high school. We already did that. Associate degree, 

[01:00:17] Joe: man. College. We’ve had all over the place. Different college degrees, uh, high school. Yeah. Pretty soon.

Jesse’s gonna be going to a kindergarten graduation in a few years. 

[01:00:27] Jesse: Preschool first. Those are such a 

[01:00:29] Joe: waste of time, Jesse. A kindergarten graduation. You’re like really just trying to get 

[01:00:32] Jesse: out of it, buddy. 

[01:00:33] OG: Yes. 

[01:00:33] Jesse: It’s not that great. No, we’ve already got all the decorations. No, I’m kidding. I agree with you. I agree with you.

Sorry. Sorry to any parents out there, but uh, I’m not gonna be throwing any big graduation parties if I have a say in it. 

[01:00:45] Joe: He’s already hired. You don’t, by the way, for 

[01:00:46] Jesse: kindergarten. That is for kindergarten. 

[01:00:48] Joe: He’s already hired Beyonce for the party afterwards. Yeah. 

[01:00:52] Jesse: Yeah. 

[01:00:52] Joe: Alright, stackers, what are your lessons from history?

Let’s hear yours either Email me, Joe at Stacking Benjamins dot com for future episode or. Uh, go to our Facebook page, the basement, and uh, that’ll be a lot of fun. Doug, take it from here, man. What should be on our to-do list? 

[01:01:07] Doug: Well, Joe first take some advice from Miranda Marqui. I think she said, be a lazy investor who knows how to trap your own food.

Seemed to work for her. I get that right, Miranda? 

[01:01:19] Joe: It’s an audio podcast. Yeah, 

[01:01:21] Miranda: yeah. It works for me. I didn’t know you were gonna ask me a thing again. 

[01:01:24] Joe: Miranda 

[01:01:24] Miranda: was given the thumbs up. I’ve been gone so long. Um, yes, yes. Learned some extra skills on top of being lazy and 

[01:01:32] Doug: as an investor. Second, Jesse told us to plan for the sequence of returns risk early in retirement.

Jesse, in 15 words or less, how exactly do we do this?

Wow. You really aren’t

just seeking to understand, 

[01:01:53] Jesse: build a buffer of. Lower risk assets for the early years. FU Douglas

15. 

[01:02:09] Doug: Oh, that’s going in the Hall of Fame right there, baby. That was fantastic. But the big lesson, if you’re gonna try to save money by making your own toothpaste, maybe don’t store it in the same kind of jar as your grout cleaner. Lesson learned. That one’s on me. Ugh. Thanks to Miranda Marqui for joining us today.

Miranda offers excellent mini courses and financial coaching, which you’ll find at miranda marqui dot gum road.com. We’ll also include links in our show notes at Stacking Benjamins dot com. Thanks to Jesse Kramer for hanging out with us today. You’ll find his fabulous personal finance for long-term Investors podcast on at least 66% of the services you’re trying to look for him on.

So just keep at it. You’ll stumble into ’em sooner or later someday. Everybody’s got a dream. Thanks also to OG for joining us today. Looking for good financial planning. Help head to Stacking Benjamins dot com slash OG for his calendar. This show is the property of SB podcast LC, copyright 2025, and is created by Joe Saul-Sehy.

Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. Oh yeah, and before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know.

This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.