Profit from ‘Black Swan’ investing
By admin on October 16th, 2008Nassim Nicholos Taleb wrote an interesting book entitled The Black Swan: The Impact of the Highly Improbable.
The book discusses about unexpected events which can appear out of nowhere and have a significant impact on our lives. Examples of this: the Sept. 11, 2001, terrorist attack on the United States, the stock market crash in 1987, and subprime lending debacle. He wrote that we can profit using this strategy in those condition, by being in the right place at the right time.
Black Swan events have three characteristics:
- They lie outside of the realm of regular expectations.
- They carry an extreme impact to humans live.
- In spite of their outlier status, human has the ability to make explanation and prediction about the event.
The book told us to focus on possible significant large events. Black Swans can be found among equities that have the potential to move on surprise news events, including possible oil and gas discoveries, and medical discoveries. The key is predit the surprises.The Black Swan: The Impact of the Highly Improbable
