The standard rebuttal to “stocks always come back”: Japan’s Nikkei needed ~34 years to reclaim its 1989 high. Ben Carlson’s counter (Risk & Reward, the Barclays CAPE chart): Japan 1989 traded at 99x cyclically-adjusted earnings — roughly double the US dot-com peak (44x, Dec 1999) — the biggest financial asset bubble in history. So Japan isn’t the base case for buy-and-hold failing; it’s what the worst starting valuation ever recorded does to it.
Both readings are useful and don’t cancel: (a) the counterexample is weaker than it looks, because no other market started from 99x; (b) it still proves single-market buy-and-hold has an unbounded worst case — the actual lesson is diversification, not “stocks always recover.” The chart’s sting in the tail: the same series shows US CAPE climbing back toward ~50 — the closer valuations get to bubble territory, the more legitimate the pushback becomes. Pairs with Buffett Indicator on how to read “record valuation” claims.
Dalio’s version of the cost (08/2026, The Big Debt Cycle template): “no crisis” was not free — JGB holders lost 51% relative to dollar debt and 76% relative to gold since 2013, and Japanese wages fell 55% against American ones in common currency. The index recovered; the currency the index is priced in did not.