* Real estate prices are back up to pre-crash levels. They could crash again given the right trigger. https://research.stlouisfed.org/fred2/series/USSTHPI * Bond yields are at all time lows. The only reason to ever buy treasuries at these ultralow yields is banking regulations that require banks to buy them. That qualifies as a government-created bubble. * QE massively expanded the money supply, most of which is sitting idle. But given some trigger for that money to start moving, such as a bit of inflation, you could see a positive feedback loop leading to even more inflation. https://research.stlouisfed.org/fred2/series/BASE * Every time the money supply contracts, the market dips. If the fed raises rates or contracts the money supply in any other way, the market will tank. http://seekingalpha.com/article/3969863-bubble-one-talking * Vladimir Putin is likely to invade another neighboring country since he was able to take parts of Ukraine and Georgia with minimal consequences. This could lead to a geopolitical crisis that could tank the markets. * Iran is likely to get a nuke sometime in the next 10 years, and crazy enough to use it. * Another terrorist attack like 9/11 is both likely and likely to tank the markets. * The S&P PE ratio is very high at 24, so there is definitely room for a 30-50% drop. http://www.wsj.com/mdc/public/page/2_3021-peyield.html * Crashes usually happen around election years... I suspect because the fed has ulterior motives. Why would anyone with that skillset prefer to work for the fed instead of the private sector anyway? They'd have to be a political animal. I bought a Jan '17 1400 PUT on SPX yesterday for $11, just in case... already up 10%
The housing bubble wasn't an unknown unknown. Lots of people knew and were talking about it before the bubble burst, but not enough of them.
Yes. As well as the 9/11 was also a known known for some. You're right to remind us that it's in the eye of the beholder. Everybody knows that the turkey will be killed for thanksgiving, However it's a black swan (Unknown & Damaging) for the turkey.
if you want to make money, instead of philosophizing about black swan events do your research on gray swan events which are far much more numerous.
there seem to be so many variables one can consider, before investing/trading doesn't the world we live in get more complex as time goes on, or is it just change? marc
For what it's worth, I read an article on investing.com (too lazy to bring it up at this time) about the most crowded trade at this time...is the anti inflation trade.
I know this is a trading site and not for investors in general, but I've had this recurring thought over the years about black swans, crashes, and volatility. I can understand why traders want more volatility...in many ways it's easier to make money because of more persistent trends and more breakouts...2008 was very exciting! My problem with the world being in crises mode, is how it affects so many people I know personally. I'm not too happy about the FED induced asset bubble were're all experiencing right now and how so many people are benefiting from it, but I can't help but think about my loved ones and whats coming for them. Do any of you think about the assets of your parents and grandparents when stocks, bonds, and real estate tank? If you personally don't have any long term assets...house...IRA...etc..I'm sure your parents and grandparents do. If anything, their loss is also your loss...you may be the heir to these less valued assets. I don't have a problem with markets correcting to more realistic levels or causing losses for asset holders...but I can't hope for 2008 all over again...even though it's coming!
Nobody can take advantage of a "Black Swan Event". But many can justify a "Black Swan Event" after it happened.