9. Every High Is a Future Low

9. Every High Is a Future Low

Every high, in the future, is a low. But people still go broke in the market — because short-term drops drag you into the bottomless. This section’s core argument compresses to its hardest form: “Every high will be a future low. But people still go broke in the market.” They look like contradictions; they are two sides of the same thing. In the long run, the market never stops rising; but in the short run, the market falls bottomless. Both are true. Both must be held simultaneously. This section handles the long-term side (“highs become lows”). The next two sections, Simulating the Worst Case and Six-Foot Man, Two-Foot Water, handle the short-term side (“how people go broke”). The two sides together are the complete market view. “Teacher, is it too high right now?” This is the most frequently asked question from CLEC students. Starting from 2018, every year someone has asked it. They asked in 2019, asked in 2020, asked in 2021 — every year someone felt “after such a rise, isn’t it too expensive to buy now?” In hindsight, the 2018 “high” was, compared to late 2023, a cabbage price. What seemed an unreachable 408 (QQQ’s marker high in that period) had, by the end of 2023, long become an unreachable low. Anyone who hesitated at 408 and didn’t buy — if they had known QQQ would surge far beyond it in two years — would have beaten their chest with regret. This is the iron law I keep emphasizing: every high will, in the future, become a low. This is not an empty slogan; it is a historical regularity verified by two centuries of stock-market data. Every time the market makes a new high, you will feel “this time it’s really too high.”

But stretch the timeframe to 5, 10, 20 years, and every “historic high” you used to find unapproachable becomes a tiny hill on the chart. The dot-com peak of 2000 looks like a pebble at the foot of the mountain from 2023. So does the pre-2008 peak. The market is always oscillating, but the long-term trend is always up. But I know — data and logic alone are not enough. Investing was never a purely rational act — when your real money is shrinking with the market in real time, no amount of data calms the panic in your gut. Let me use 2020–2023 to make “the feeling that I did it wrong” clear as a normal state. Long-term holders during this stretch lived through:

• March 2020: U.S. markets hit three circuit breakers; the Dow fell 2,000 points in a day; the news was full of “end of the world.” Those who bought into the panic — the moment after they hit the buy button, the market kept dropping. “Did I do it wrong?” pops up immediately.
• Early 2022: Russia-Ukraine war breaks out; geopolitical shadow everywhere. Buy again — keep falling.
• Late 2022: U.S.-China semiconductor bans plus Fed rate hikes; NASDAQ retraced more than 30% for the year. Another “buy” — another “drop.” If you only look at that stretch, every buy was “wrong.” But everyone who held to the end of 2023 without selling saw their accounts back to +20% or more — every dollar bought in the dark earned generous returns on the rebound. The moment “the demon in your heart” tells you this road is wrong is precisely the darkness right before dawn. This reveals a deep truth of investing: between the moment you decide to buy and the moment you finally profit, you will almost certainly pass through a period of “feeling like you did it wrong.” This is not the exception; it is the rule. Because short-term market moves are random, you cannot precisely buy at the lowest point every time. Buy, keep falling; buy, bounce, fall again; buy, sit flat for ages — all of these are expected. What truly determines your end result is not the short-term P&L after you buy, but whether you can keep composure through these short-term swings, hold without selling, even keep adding. This is the practice of “Mount Tai collapses before me and my face doesn’t change.” This is not innate, nor learned from a book — it requires real market experience. You have to live through a real crash, watch your account shrink 30%, 50%, even more, and stay calm and do nothing. Only then is real inner resilience built. Each storm endured adds a level of capacity. Market volatility will never go away, but your fear of volatility can gradually decrease.

Key Points

One, from 2018 to 2023, every year someone said “too high,” and every one of those highs became a low in retrospect. This is a regularity verified by 200 years of stock-market history — short-term oscillation is constant, long-term direction is always up. Whatever you find expensive today will look cheap in five years.

Two, the real experience of long-term holders: in the chain of 2020 circuit breakers, the 2022 Russia-Ukraine war, and the semi ban — every buy was followed by more dropping. “Did I do it wrong?” is the norm, not the exception. But hold to end of 2023 and total profit exceeded 20%. The darkness before dawn is one every investor must cross. Three, “Mount Tai collapses before me and my face doesn’t change” is not innate. It needs real market experience to forge. Each crash endured grows your resilience by one level. Volatility never goes away, but fear of volatility gradually fades — time and experience are the best teachers.

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Iron Law III: A Crash Is Your Best Friend

● Young People Should Pray for a Crash ● Simulate the Worst Case ● A Six-Foot Man Drowning in Two Feet of Water A six-foot man drowns in water that is, on average, two feet deep.

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