In the financial markets, what scares people the most is not the stock market crash, but the Black Swan phenomenon. This is a term that refers to the sudden and unexpected collapse of the entire financial system, causing the economy in general and the financial industry in particular to plunge into a recessionary nightmare.
A Black Swan is an unpredictable event that goes beyond the normal principles of a situation and brings serious consequences. In finance, Black Swan is often used to refer to a dark period of the entire industry when a continuous downtrend takes over the market.
The term became popular thanks to Nassim Nicholas Taleb, a finance professor, writer and Wall Street trader. Nassim Taleb wrote about the Black Swan concept in a 2007 book published before the event occurred. He argued that because Black Swan events are unpredictable due to their scarcity but bring a catastrophic consequence. Therefore, it is important that everyone always assumes that a Black Swan is a possibility and tries to have a suitable plan to deal with it.
See details: What is a Black Swan? Summary of Black Swans in Financial History
Translations
Vietnamese: Black Swan (thiên nga đen) là gì?