When I was a little boy, my mother warned me that I should never try to catch a falling knife. She said, “It just isn’t worth it. If the knife lands on the floor, the worst thing is that you’ll have to wash it off before you use it. But if you move too quick, the knife can get stuck in your hand. You have no idea how much that hurts and how much blood you’ll lose! Worse than that, your hand may never be the same.” Good advice—I’ve followed it ever since. Decades later, however, it occurred to me that something like this applies as much to plunging stocks as it does to falling knives. The main difference is that knives follow an unchanging pattern: they hit the floor in a split second, then don’t go any lower. When stocks start falling, they may hit zero, but it can take them years, or a split second, or anything in between. In our…