Downside Protection is also an essential element in the construction of a portfolio designed to withstand Black Swan events.
Almost every institution said they are or will soon be offering a product to guard against black swan events or tail risk.
Every major and minor business publication is writing about Black Swan events.
It was a cutting, humbling lesson, a reminder that beauty rests in the eyes of the beholder, that outlying black swan events do happen.
Taleb contends that banks and trading firms are very vulnerable to hazardous Black Swan Events and are exposed to losses beyond those that are predicted by their defective models.
With all the talk in the past three years of Black Swan events, it is worth thinking about what would happen to world markets if Saudi Arabia descended into chaos.
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Is it structured to fend off the asset-eroding potential of triggers such as so-called Black Swan events, Black Monday-level market implosions, interest and inflation rate swings, war or an oil supply disruption?
Black swan events are the norm.
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That is, unless several "Black Swan" events skew their predictions.
The reason is that such a document spells out a logical asset allocation given one's financial goals, discusses the historical levels of volatility inherent in the chosen allocation and mentally prepares the investor for the harsh reality that periods of "black swan" events do happen.
And the Black Swan is a famous book about extremely rare events that most financial models cannot predict.
In scientific literature these events are called the emergence of the Black Swan.
The report gives a list of eight "Black Swan" scenarios -- a reference to Nassim Nicholas Taleb's book "Black Swan, " which posits that history is built on unforeseeable, surprise events.
From an investor's perspective, the idea of planning for low-probability, high-consequence events is well treated in Nassim Nicholas Taleb's book The Black Swan: The Impact of the Highly Improbable.
"So, uh, technology, I guess it's a big theme at the festival, " said Mr. Aronofsky, the 44-year-old director of, among others, "Requiem for a Dream" and "Black Swan, " during the last of four "Tribeca Talks: Directors Series" events.
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