What’s a Black Swan?


By definition, a black swan is an unexpected event. They are rarely seen in  nature, and in the financial markets, the term was reserved for the very unexpected, multi-standard deviation move.

Now that current market volatility has produced the bear market of a lifetime, and may still have further to go, these huge market moves are no longer unexpected. That forces me to ask: what's the new definition of a black swan? Is it a day when the Dow Jones Industrial average changes by less than 200 points?


We now know for certain that the tails of the curve appear more often in the real world than is predicted by the bell curve. That's what Nassim Taleb has been telling us all along.

I sincerely hope that most readers are in reasonable shape, considering the devastation in the markets.

As I write this (11PM Thursday) it appears that the markets will open much lower on Friday, Oct 11. I'm sure the government will be hard at work over the weekend trying to do something. That means that we can expect yet another volatile Monday.

Be careful out there! Esterhaus


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