The business cycle is a thing. Passive investing means expecting that, and not selling at the bottom. (For short-term liquidity needs, you shouldn't be in the stock market at all).

If the cycle is long enough, like in Tokyo, where the Nikkei is only at about 60% compared to its 1989 value, then it is of no use at all, unless we think of the “in the long run we are all going to end up dead” as a good investment strategy.

There are also Black Swan-like events of stock exchanges and entire markets disappearing completely, like it happened in Russia after 1917 and in China after WW2.

There was a severe bubble leading up to that, characterized by corruption and negligence. I'm not sure it's a good example.

If something like the Russian revolution comes along then all bets are off, it pretty much doesn't matter what you did with your money as long as you didn't flaunt it.

Are you sure we are not currently in a “severe bubble characterized by corruption and negligence?”

I think I could argue both sides pretty convincingly. It is easy to see in hindsight, not so easy in the thick of it.

You’d need a fundamentals-based argument like “the economy is all based on lies” and “technological innovation has stopped” to proclaim something like that, not just “there’s usually a downturn every 10 years or so.”

The business cycle is a theory, which very well might be self fulfilling. Who makes the most profit from a market decline?