Buy the options with the intention of them either hugely appreciating in value or expiring worthless. Under Taleb's system, your bet sizes should be small enough that it doesn't matter if individual options tranches expire worthless. The bid/ask spread only matters when you try to cut losses on a large bet, which is outside the scope of this strategy.
Your quote is something that AI mania speculators often like to reassure themselves with, but consider the fact that it took 17 years for the NASDAQ to recover from the dotcom bubble when adjusting for inflation. What's being early by a year or two when the consequences take decades to heal over?
If you want to sell all your tech stocks because you think that it's irrational then take your neutral position. You won't profit from stonks going up but you won't get anything from them going down either. You've isolated yourself from them.
What the quote is advising against isn't neutral positions or pulling out early during an upturn. It's about trying to time downturns.
If you want to profit from a stock going down, you need to hold inverses like shorts or selling call options / buying puts. These inverses are always short term positions, there is no such thing as a cheap long term asset that profits when stocks go down.
Basically if you want to profit from a predicted downturns, becuase you think some asset is irrationally overvalued, then you don't just need to be right, you need to be right and time it. Because it doesn't take long before you go bankrupt holding these sorts of inverses. Aka market stays irrational longer than you can solvently hold these risky positions.
The 17 year recovery time literally has nothing to do with this btw. It's all about short term.
See the other posts in this thread discussing Nassim Taleb's strategy of small bets spread over time with highly asymmetric rewards. You can afford to lose it all on small bets nine times in a row, if on the tenth bet you achieve a 100x payout.
The Nasdaq 17 year figure is only true from the peakiest peak of ~4800 in March 2000. Two years earlier, in March 1998, it was at 1750. It had hit 1750 again by August 2023.
All this to say... shorting 1-2 years early doesn't work. You don't have the patience or capital to actually maintain a short position for two years while the market goes from 1750 to 4800. You can cheaply sit out in cash, if you want, but that's not a short position. And the S&P500 hasn't seen the kind of 300% run-up over an 18 month period that Nasdaq did in the dotcom boom.
