The Black Swan Theory serves as a reminder to investors that unpredictable events can radically change our lives, society, and the markets.
The Black Swan Theory, based on a recent book by Nicholas Nassim Taleb called “The Black Swan: The Impact of the Highly Improbable,” analyzes how events that were completely unexpected, or perhaps considered impossible, radically changed the world.
Historical events such as the attacks of September 11th, 2001 and the invention of the personal computer are categorized as Black Swans: they were unforeseeable, and their enormous impact on human civilization was only explainable in hindsight, according to Dr. Taleb himself.
This notion supports the idea of a “Random Walk,” as in the Efficient Market Hypothesis, which suggests that because tomorrow’s news is entirely unknowable today, investors must learn to respect the fact that short-term predictions are not likely to account for the amount of uncertainty present.
What is the Hindenburg Omen and is There Any Merit to it?
Is There Such a Thing as the “January Effect?”
Forex trading is the process of speculating on currency prices with the purpose of making a profit | Learn more with Tickeron
In general, a will must be signed in the presence of two witnesses, each of whom must also sign your will. Whether or...
Currency exchange rates will fluctuate with various macroeconomic factors such as inflation, interest rates, and so on
The Rectangle Bottom pattern forms when a currency pair price is stuck in a range bound motion, between support/resistance levels
Discounted Cash Flow (DCF) uses an estimated future cash flow amount and a Discount Rate to determine the Present Value
The Bond Purchase Agreement is the contract in which the underwriting firm states the price at which they intend to...
Commodity indexes are informational services which reflect the price action in a designated commodity or basket of them
The Capital Market Line is a complex concept, but put simply, it is a calculation meant to give the investor/analyst...
Bonds are divided into a several categories, and it is possible to get substantial diversification within a bond...
The assets within the ABS generally tend to consist of different kinds of debt receivables, such as credit cards, auto loans, home equity loans, and so forth.