Top 10 Black Swan Events That could Crash The Market in 2020 ! It was rare in Europe to see a black swan, and nobody there thought one existed. This view was held for a thousand years.
Until the Europeans arrived in Australia and were shocked to find that swans could be black.
That's why its called a "Black Swan Event" - an event that nobody saw coming.
A black swan is a metaphor for an event that comes as a surprise but has a massive impact on the market and is later rationalized.
For instance, the 2008 housing downturn was such an event. Now it’s pretty clear why and how it happened, but only a few saw it coming in 2007.
A black swan event is a term coined by Nassim Taleb which has three characteristics .
It’s unpredictable.
It has a massive impact.
Afterward, everyone comes up with an explanation for it.
Besides, one man's black swan event is another's false flag event.
The fragility comes from being unaware of unexpected events. Easily, you can see a system that is incredibly fragile, and thus a Black Swan, though unexpected, can cause a very predictable disaster given the conditions.
Black swans are events which are concave in nature, i.e., given our existing methods of forecasting, we ignore them. The idea is to have tests and their forecasts based on antifragility and then separating those outcomes which are completely possible given the current scenario. It is like the time paradox. If you go back in the past, the past might change entirely or not, i.e. if a possible event is predicted, it should be removed from the list of black swans as it might as well be predicted by many other people. But here again, is a catch of probability; if the masses anticipate it, it might be averted. However, like the CDs mania started after the 2nd quarter of '07 when the adjustable rates kicked in, the people rather than predicting the underlying's deteriorating value just went into buy and sell mode. Conclusion: Use the Mandelbrot set.
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The Stock market reaches a new all-time high mark one after another. This trend seems hard to break. However, the market is cyclical; what goes up eventually will have to come down.
You only prepare for a black swan. You can't predict it, which means building systems in a way that they can take volatility. In case of 2008, crisis prediction is the cause of the black swan.
The best indicator is called the "Bankster"; it means, when the majority of Banksters on Wall Street is short, then the market will crash.
Banks borrow from the Fed at 0% interest. They charge me 22% on my credit card and no interest on my savings.
When I get cold calls offering me up to $500,000, It is time to get out.
Black swans are not unlikely events or necessarily negative events - they are events so outside history that they cannot be predicted, and how the world will react to them is not known. Unlikely negative events are modeled for all the time with probabilities and such.
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