“Black Swans and Stunned Mullets - Two Species Often Found Together”
Black Swan Events occur when something that was totally unforeseen, or at least very unlikely, happens.
On that basis, if you had listened to the experts, the win by Trump, certainly qualifies. The airwaves were full of forecasts of a Clinton win. The smug certainty of all the pollsters and forecasters before the election is now matched only by their “stunned mullet” demeanour since the election. Talk about egg on face, or any of dozens of other metaphors, but the message is clear – the experts often get it wrong – way wrong.
But then it is not all experts. Some actually called it right (one was Perpetual’s Mat Sherwood), but they were drowned out by all the others, and by the media. Ah, the media. By all accounts the most stunned of all mullets yesterday were the Canberra press people. Here they were at the centre of things, so certain of their powers of observation and deduction, that they could not handle the fact that the result was otherwise.
The GFC was much the same. Some people did see trouble coming, but they were a small minority and their voices were drowned out.
What does this mean for Financial Planning?
We call our business “Black Swan Event Financial Planning” to remind ourselves that the unexpected can not only happen, but in the world of investing often does. We remind ourselves of 2 things:
1. Don’t think we know it all. The unexpected can easily happen and often does.
2. When the unexpected happens, don’t get stubborn about past decisions. If there have been fundamental changes to the economy or the political scene, be prepared to change in response.
----------------------------------------------------------------------------------------------------
Contact me if you require an expert speaker on your "financial future" at your next event or presentation.
Ph: (+61 8) 9322 7818 or email: This email address is being protected from spambots. You need JavaScript enabled to view it. web: blackswanevent.com.au
