Ignorance is Bliss But When Ignorance is Construed as Knowledge, It is Dangerous....
Most, if not all analyst on sell-side are paid to do "research" and most, if not all do "re-search". Quality of research is inversely co-related with quantity of reports being churned. I usually avoid reading them but sometimes it gets way too ludicrous. Jargon's are applied without having an iota of idea about its implication. If these analysts had "skin in the game" then they would be much more careful in producing reports. They are paid and have minimal at stake in their calls. Hence, "Bull-Shitting" is birth right.
FUNNY CHART FROM SOC GEN....
The above chart is as funny as it can get and could have been made much more decorative....
BASIC CONCEPT OF BLACK SWAN IS.....NO ONE CAN ANTICIPATE BLACK SWAN EVENT AND THAT IS PRECISELY THE REASON WHY THOSE EVENTS HAVE HUGE IMPACT...Yet here we have some real hard work done by a brokerage house who has not only identified black and white swans but also put probabilities to those events. I wish putting those probabilities had link to his pay then probability part won't be there. Also, some more colorful swans should have been put at the peak of the structure then picture would be complete.
I will just give couple of example of black and white swan....
1) Lehman was a black swan event because no one could have fathomed such big investment bank being allowed to go bust....hence impact was very powerful....all the black swans in above picture are known to even TV anchors on "Business Channels"
2) Congress Government (India) comfortable victory in May 2009 was a white swan event...since no one had anticipated them to win with such comfortable margin....Hence, entire market (Nifty) went limit up....White swan put above are as lazy thinking as money printing done by central banks across world.....
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