In venture capital, the greatest danger isn't investing at high valuations during a boom; it's ceasing to invest during a bust. The psychological pressure to stop when markets are negative is immense, but the best VCs maintain a disciplined, mechanical pace of investment to ensure they are active at the bottom.

Instead of fighting or fearing market downturns, a superior strategy is to consciously "surrender" to their inevitability. This philosophical acceptance frees you from the draining, low-value work of predicting the unpredictable (recessions, crashes) and allows you to focus on owning resilient businesses for the long term.

The textbook value investing response—buying more as a stock falls—is often impractical. In firms focused on short-term performance, a stock dropping from $70 to $30 after a buy recommendation can get an analyst fired, even if the thesis is ultimately correct. This institutional pressure shortens time horizons.

Investor Peter Lynch's advice highlights that trying to anticipate downturns often leads to missed gains, which can be more costly than the losses from the downturns themselves. The best strategy is often to stay invested rather than waiting on the sidelines for a crash that is impossible to predict.

Economic downturns cause panic, leading people to sell valuable assets like stocks and real estate at a discount. Those with cash and financial knowledge can acquire these assets cheaply, creating significant wealth. It becomes a Black Friday for investors.

During profound economic instability, the winning strategy isn't chasing the highest returns, but rather avoiding catastrophic loss. The greatest risks are not missed upside, but holding only cash as inflation erodes its value or relying solely on a paycheck.

Even if an investor had perfect foresight to buy only at market bottoms, they would likely underperform someone who simply invests the same amount every month. The reason is that the 'market timer' holds cash for extended periods while waiting for a dip, missing out on the market's general upward trend, which often makes new bottoms higher than previous entry points.

The emotional drivers of FOMO (buying high) and panic (selling low) make the simplest investment advice nearly impossible to follow. A diversified, 'all-weather' portfolio protects against these predictable human errors better than high-risk concentrated bets.

A whole generation of market participants has never experienced a true, prolonged downturn, having been conditioned to always 'buy the dip' in a central bank-supported environment. This lack of crisis experience could exacerbate the next real recession, as ingrained behaviors prove ineffective or harmful.