BAGAKOAA; October 19, 2012 The Grey Swans Are Killing Me

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October/2012
The Grey Swans Are Killing Me

 

This was going to be the lead in for the investing/economic section set around the incident known as a Black Sawn, but as soon as I typed it, it reminded me of a funny thing that happened to us about 15 years ago.

 

Devin and I and Man Child, then just a squid, were in New York trying to get rid of our daughter Kristin, by sending to the most remote school we could find, NYU.  On one of our visits, the initial visit if my memory serves me correct, we chose to do some sight seeing.

 

One locale we decided on was, the Statue of Liberty.  We went on a cold drizzly day, but despite that, there were a slew or slough of folk.  Devin has some claustrophobia issues and I have some ambition issues so Kristin chose to go to the crown of the statue herself.  Devin and I, with future Man Child in tow, went to the tourist coffee shop and waited.

 

There was a bratty, obnoxious, three year old running around the crowded coffee shop and his parents were pretending like he was not theirs, and I could not blame them.  I looked out onto the grass and there were about 260 Canadian Geese on the lawn saying, "Wow, nous n'avons pas statuts cool comme cela au Canada."  But I digress, in French too.

 

Well the parents chose to give the beastly child a doughnut, apparently thinking he needed more sugar.  And the child spotted the geese.  He banged and banged on the door to go out with the geese.  I watched as he pressed the bar that would open the door and the fun began.

 

Devin and I watched as the future serial killer made his way across the damp grass as 253 (Seven went into the city to see FAO Schwartz) geese lifted their heads and spotted their prey.  As beasty boy continued walking down the lawn the gaggle made its way onto their webbed feet and started their march towards the boy.

 

The heard of geese spotted the doughnut.  Even son of satan soon figured out there was a problem as the geese were almost to him.  He turned and ran towards the now closed coffee shop door.  Just as he slammed into the door, about 24 geese were pecking at the back of his head and hands, as he had long ago dropped his sugar fix and they were now just in it for the taste of flesh and blood.

 

The coffee in our cups was still hot as we savored the moment when the parents came to the child's rescue.  He was crying hysterically as he clung to his mother.  The coffee shop was now a bit quieter and all who had witnessed the massacre was glad that the child was not running around the coffee shop.

 

So now for the actual intent of the black swan reference.  The term Black Swan has become a metaphor for the expected unexpected event.  In investing, a block swan might be like the trading hiccup of a few years ago or the BP Oil Rig Blast.  The significant Black Swan event can take down a stock and take down a market.

 

If you care, the term black swan comes from the fact that in England for centuries was known as an impossibility as all swans are white.  In reality and since its discovery in Australia, there are Black Swans.  Genetically white swan can produce black swans but the odds are astronomical.

 

The current usage of Black Swan can be attributed to Nassim Nicholas Taleb as he referenced the term in his 2004 book "Fooled by Randomness".

 

In February of this year, I was counting on a Black Swan this year.  I started buying call options on the VIX derivative VXX.  Unfortuantely all of my swans have turned grey.  Yes, almost all of the expected unexpected events have either not materialized or been priced into the market, calming, I'd say sedating the market volatility I need to see a phenomenal return on our volatility index play.

 

The Black Swan seems to have mated with the White Swan giving me Gray Swans which are not helping my VXX wager.  (Though we had an interesting spike today.)     

 

  

Salve Lucrum

 

 

 

 

 

 

 

 

Brian Ireland
 
 
Since 10/10/2012
BAGAKOAA;

I am not a professional investment advisor. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. There are many more qualified people than I to actually tell you how to invest your money.

BAGAKOAA=Boys And Girls And Kids Of All Ages

Salve Lucrum=Latin for Hurrah for Profit.

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