So it's like February 1928...

Monday May 25, 2026

I wanted to follow-up on my post about where we are in a theoretical crash time-line. Here is the month over month returns for the S&P over the most commonly referenced “crash” periods.

And here is recent market history.

There are a couple things that need to be noted. First of all we have market circuit breakers now. So the big October 1929 crash can not happen anymore. So just skip over that huge drop month. Second it is unlikely we are going to enter a dustbowl as we did in the 1930s and the US now produces its own oil. And there is no Hitler in Europe. Everyone has McDonald’s now. So the extraneous market factors are not the same.

And most importantly, prior to 1981 or so there weren’t share buybacks. Today, there are lots of those.

One thing to notice is the “crash” really wasn’t abrupt in any former case. The wheels wobbled, steadied, wobbled, steadied, wobbled some more and then fell off. The period of wobbling and steadying took a very long time. The reason is it takes a long time for enough people to change their mind to push the entire market in the other direction.

There was amble opportunity to recover from an initial hit and get off if you didn’t panic and weren’t running leverage.

That is really the key to surviving any crash. Not panicking. And not being caught running leverage UNLESS you are short. Then congrats on your new island.

And then, you have to be one of the first to realize it’s time to get off, or go short.

I won’t be trying to time a crash unless there is something very obvious. Like Tariffs were last year and Iran was this year. And most likely there will be something very, very obvious. More on this in a second.

I wasn’t alive in 1928 but in 2000 the pin that pricked the bubble was the court ruling that Microsoft was a monopoly in 2000. The Fed had already started raising interest rates prior to this ruling.

Twice.

But, that ruling is what caused the greatest uncertainty. The market was already weak.

So watch for any regulatory actions against AI and watch for Fed policy changes (which I think everyone is doing already.)

And watch the Superbowl.

In 2000, there were 20+ ads from dotcom companies. Right before the NFT market imploded there were numerous Superbowl ads from those companies. In 2000, pets.com, monster.com, hot-jobs.com, computer.com, lastminutetravel.com, onmoney.com, ourbeginnings.com… all paid to advertise on the Superbowl. That is a pretty obvious sign of stupidity. Don’t you think?

This past Superbowl 15 ads were AI generated including a Vodka ad. There wasn’t an add for mypersonallifecoach.ai.

We aren’t there yet.

-AJ