The release of The Black Swan was just prior to the U.S. housing market collapse which began in mid-2007. Taleb had a footnote in his book warning of this potential Black Swan so he had some foresight.
 
In an interview for his book “The Bed of Procrustes” he stated:
 
“The coming crises from excessive debt will make 2008 look like a picnic.”  and

”The stock and bond market in brief: participants are commonly in line to be slaughtered when they think they are in line for a Broadway play.”

Fulkerson Capital Management
A 5-Star Rated Wealth Manager

Black Swans


The Black Swan, was written by Nassim Taleb in 2007. In it he described Black Swan Events as “Unexpected major events of large magnitude and consequence that play vastly larger roles in history and stock market performance than regular occurrences.”

Examples are:

·         WWI and WWII

·         The Advent of the PC and Internet

·         September 11th attacks

·         U.S. Housing market collapse


These events can be good or bad as the advent of the PC and Internet had a major positive impact on the world. It is important to understand these events usually cannot be forecasted  in terms of what the event will be or what its impact will be on the world. For example, very few saw the U.S. housing market collapse coming and most underestimated the impact it would have on the world. Without massive, unprecedented action by central banks and governments from around the world, the DOW would likely be around 4,000 today. Investors need to plan for Black Swans, not ignore them and hope they never happen.


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