My Third Hanging

Tanvir Alam

IN THE COEN BROTHERS’ excellent movie, The Ballad of Buster Scruggs, James Franco’s character is set for a good old-fashioned Wild West hanging. Franco appears to accept his fate, but there’s a poor slob next to him with a noose around his neck crying inconsolably. Franco quizzically turns to him and says, “First time?”

I cracked up when I watched that scene. It has since become a famous meme. I feel like uttering the same phrase when younger friends, coworkers and mentees come to me for personal finance advice. They’re shaken, scared and horrified by this year’s stock and bond market performance.

Frankly, they should be, because most have only been investing since 2010 or so. This is the first really ugly market they’ve seen. We’re in bear market territory for the S&P 500—defined as a 20% decline from the high—and we’ve seen a 16% decline for 10-year Treasury notes in 2022. According to market commentator Charlie Bilello, a 60% stock-40% bond portfolio is on pace for its worst year since 1937.

As market veterans know, when the market declines, the doomsayers come out in droves. My favorite is “Dr. Doom” himself, economist Nouriel Roubini, who deftly predicted the 2008 great financial crisis. Roubini now predicts a 40% U.S. stock decline, accompanied by a long, ugly recession, according to a Bloomberg headline.

Of course, he’s joined by many other doomsters. Among them are cult investor hero Michael Burry, who predicts the “mother of all crashes,” according to the New York Post; the relentlessly self-promoting Robert Kiyosaki of Rich Dad, Poor Dad fame; and even eminent investors like Jeremy Grantham, who predicts the final catastrophic end of a “super bubble.” Any day now, someone will call this the death of equities, CNBC will trot out a “Markets in Turmoil” segment and a strange-looking, messiah-like man will be holding up a sign that reads, “Repent! The end is nigh!”

Welcome to the execution. First time?

Personally, this is my third. Let me be clear: I’m defining a market execution as a long, painful, drawnout crash. This is unlike the 2018 China tariffs crash or even the 2020 COVID-19 crash. Both market declines were followed by quick recoveries. Such V-shaped market bottoms have conditioned investors to buy the dip.

There’s been no quick recovery in 2022, however. There are, instead, bear market rallies that fizzle. Buying the dip has made you feel like a dupe. This bear market is a grinder, and that’s incredibly scary for a new generation of investors.

When I first started investing in the early 2000s, the 2000-02 internet stock crash slashed the S&P 500 by 49%. This was followed by the 2007-09 crash that had a drawdown of 57%.

These were extraordinarily painful periods, but investors were richly rewarded if they hung on. In between, though, they had to deal with a market execution. Market veterans will recognize this pattern. The market grinds lower, the doomsayers come out, a historian will announce the end of the American empire, every rally will be called a “suckers’ rally,” your neighbor will tell you that the market is rigged, and you’ll be tempted to sell it all just to make the emotional pain stop.

The only advice I have for you is to tune it out. Don’t check your statements. Don’t read The Wall Street Journal. Don’t listen to bloviating investors on CNBC, except for maybe good ol’ uncle Warren Buffett, who famously quipped, “I don’t pay any attention to what economists say, frankly… can you name me one super-wealthy economist that’s ever made money out of securities? No.”

“Buy low” is so very easy to say and so very hard to do. As chartist Walter Deemer says, “When the time comes to buy, you won’t want to.” I’ve been buying 100% stocks every month, just like I always do, and I feel like a fool every month.

I have no idea when it will stop. I have no idea if Grantham, after a decade of predicting a great crash, will finally get one. He may and, if it comes, I’ll be putting every single dollar I can into stocks. After all, I’ve already been hanged. Twice.

Tanvir Alam has been practicing corporate law for more than two decades, but you shouldn’t hold that against him. He lives in New York’s Hudson Valley with his patient wife and two skeptical teenagers. Tanvir is interested in personal finance and travel, and is trying desperately to become a runner. Follow him on Twitter @Docket75, read his blog at and check out his earlier articles.

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