Crash Test Dummy: How to Survive the Coming Market Crash (and Thrive in the Next Boom)

by Tobias Carlisle

The stock market is going to crash. That's not a prediction. That's history. Since 1929, the S&P 500 has fallen 20 percent or more roughly once every seven years. An investor with a 40-year horizon should expect to live through five or six bear markets, including at least one that cuts a stock portfolio in half. No one can tell you when the next one begins. But history is clear about who comes through it best: not the people who predicted it, but the people who prepared for it. Car makers don't know when any particular car will crash. They crash-test it anyway, with dummies wired to show exactly where the damage will occur, so it can be fixed before anyone gets hurt. Crash Test Dummy asks you to do the same with your portfolio: run the crash on paper now, while markets are calm and the fixes are cheap. Drawing on a century of market data, Tobias Carlisle shows you how to: Know what drives crashes : the four engines of valuation, leverage, rate shocks, and outside shocks, and which warning signs have a real record Build a cash float and remove the debt that turns temporary losses into permanent ones Set a portfolio built for both kinds of crash : deflationary, like 2008, and inflationary, like 2022 Judge every hedge honestly , from Treasuries and managed futures to tail-risk funds and leveraged ETFs Write rules for the storm : rebalancing bands, a drawdown playbook, tax-loss harvesting, and Roth conversions at depressed prices Protect your income and retirement from job loss and sequence-of-returns risk Deploy capital near the bottom with a simple tranche plan at -20, -30, and -40 percent Stay wealthy through the boom that follows, when the next crash is quietly growing Every chapter ends with a checklist. The checklists are gathered at the back in The Crash Playbook , with blank templates for a one-page investment policy, a drawdown playbook, and a deployment plan. Data-driven and practical, Crash Test Dummy offers no forecasts. It is written for individual investors who manage their own money, whether you're building a portfolio or drawing on one in retirement. The best time to prepare for a crash is now. About the Author Tobias Carlisle is the founder and managing director of Acquirers Funds. He is the author of Soldier of Fortune , The Acquirer's Multiple , and Deep Value , and a coauthor of Concentrated Investing and Quantitative Value . He writes about deep value investing at tobiascarlisle.com.