Unexpected bad news, war, assination, terrorist attack might cause the market to tank and could badly hurt a long position. On the other hand, are there any "black swans" that could cause the market to explode upward and hurt a short position? I'm thinking of something more explosive than the monthly employment report, fed meeting,etc. [And yes, I realize there might be "black swans" that are there but are totally invisible.]
Some unexpected change in the rules. For instance, if they said something like shorting uptick was reinstated along with a reinstatement of collar rule and or other rules at the same time. Then again, it could be completely unexplained. You see a lot over the years.
Goverment Organizations have people, plant, and equipment just like any tax paying business. If government orgs had to cover their own costs (like businesses do) and pay a dividend to the country (like businesses do) then that would be a major boost to the stock market.
The surprise fed actions on 10/15/98 and 1/3/01 were both good for pretty nice spikes up that could hurt if you were holding leveraged shorts.
Iâll give a black swan explanation: Bearish black swans are really the end product of excessive American optimism. We tend to look at everything through the most optimistic lens, hence, we tend to be shocked beyond belief when common negative events occur, like markets crashing every 5-10 years, etc. Other cultures that are more realists in views, like the Russians, Scandinavians, Chinese, etc, tend to be more pessimistic, so negative experiences donât shock them as much, because they sort of expect it.
Hypothetical positive black swans of a major variety: -- Fusion energy works! (Dow 20,000!) https://lasers.llnl.gov/missions/energy_for_the_future/life/ http://en.wikipedia.org/wiki/Fusion_power -- Nanofactory developed! http://en.wikipedia.org/wiki/Nanofactory -- Unbelievably huge reserves of oil discovered somewhere -- anywhere! -- Massive biotech advance! -- Atmosphere scrubber developed making burning coal a-ok! -- New batteries render gasoline obsolete! So most are tech related or energy resource related. Calling them "white swans"doesn't really do it b/c black swans are used to falsify inductive logic, and so come to mean "extremely unexpected." btw nice S&P swan above-- or goose I guess...