Was the Brexit vote a highly improbable black swan or an obvious gray rhino?
The answer to this question depends on just how improbable something needs to be to be considered unlikely, and on your own relationship with predictions. Rethinking how you define probability can shape your future views on the markets and your investment decisions.
Black swans are evident only in hindsight. By contrast, you can see a gray rhino coming ahead of time. You may not know exactly when it will happen, but the “if” is highly likely. You may even account for the possibility that it might change its path in time to avoid a trampling, but unless you have a plan to make that happen, don’t bet on it.
Read more in the July 1, 2016, article on Seeking Alpha.
Founder & CEO at Gray Rhino & Company
Michele Wucker is a policy and business strategist and author of four books including YOU ARE WHAT YOU RISK: The New Art and Science of Navigating an Uncertain World and the global bestseller THE GRAY RHINO: How to Recognize and Act on the Obvious Dangers We Ignore. Read more about her at https://www.thegrayrhino.com/about/michelewucker
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