Now Economic Gravity Will Finish It
Black swans’ have three main characteristics:
1. They are unpredictable
2. Have a big impact
3. Afterward, people come up with explanations for why the event was predictable
Recently, a pair of black swans converged, sparking a market riot. As of Monday’s market close, the S&P 500 traded down 18% from its all-time high in a matter of only 13 days.
Prior to this episode, the fastest selloffs of a similar magnitude were:
28 days in 1929
31 days in 1998
38 days in 1987
So, if you’re having a hard time catching up to things as they’re developing, it’s normal to feel that way. These are abnormal times.
There is a behavioral term called ‘anchoring adjustment conservatism.’ It refers to the natural tendency we all have to anchor to our existing assumptions. How we see ourselves and the world around us is rather sticky.That’s what makes black swan events so challenging. They come out of nowhere and pull the rug out.
Black Swan
#1: The Coronavirus
Only a few weeks ago, the S&P 500 was up 5% for the year and the economy seemed to be humming along. Then the economic outlook was infected by the coronavirus.....
Black Swan
#2: Oil Armageddon...."
www.forbes.com/sites/michaelcannivet/2020/...-will-finish-it/ 
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