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Gray Swan Event (Investing) Definition

Definition

The word grey swan event identifies a episode of large impact, which is anticipated, but also has a relatively lower likelihood of occurring. Usually recognized in hind sight, individuals assume the danger of a grey swan event once they purchase financial markets.

Explanation

A grey swan is actually a metaphor for something that’s surprising to a particular level, since swans normally are whitened. The Word is Based on the publication The Black Swan, the Impact of the Highly Improbable, that was composed by Nassim Nicholas Taleb. The gap between Both of These Kinds of occasions is subtle:

  • A grey swan event might be likely to some certain level, and also its impact might be reasonably anticipated.
  • A dark swan event can be an uncommon event, that will be beyond what somebody else could reasonably expect.

To be tagged as a grey swan event, it has to likewise have substantial influence on a financial market, or even unique security.