Do You See A Black Swan On The Horizon?

The economy across the pond is slowing considerably, and the dollar is at its lowest point for some years – and yet the Dow Jones is reaching record-breaking milestones.

Here in Britain, the Bank of England advises prudence as the stock market continues to gently rise. And why should it do otherwise? After all, there is rapid growth in the world economy and, here at home, the profitability of our corporate sector remains good.

But do you see a ‘black swan’ on the horizon? A black-swan event, according to Nassim Nicolas Taleb (author of The Black Swan), makes reference to the Australians’ surprise discovery of swans that were black in colour instead of white. It makes reference to the fact that people in general are astonished by the unexpected because we simply think the ‘unexpected’ is ‘impossible’. Because it lay so far outside the realm of our expectations, the impact of a so-called black-swan event is often seismic in proportion.

So far as I can tell, the commonly-held view is that the markets are presently awash with white swans – but, if you squint your eyes, might that be a black one on the horizon?