Everyone wants to be able to feel like they understand the world around them, particularly when something unthinkable as the COVID-19 pandemic occurs. At times, we may take a cold comfort in thinking that these events could have been predicted, and yet somehow we just didn’t see it coming.
There is a name for events like this. Black Swan events. As Richard Cayne of Meyer International in Bangkok, Thailand will tell you- it would certainly be nice if we could always just blame the universe around us for hitting us with catastrophe, but the truth is that there really are ways to protect ourselves and our business interests if the right measures have been put into place.
The author Nassim Taleb expounded on the notion in his book The Black Swan:
the impact of the highly improbable.
In his book he defines a black swan event based on the following criteria:
To give you another example, the dot-com bubble has since been designated as a black swan event due to the fact that the internet was, at that time, a fresh, new concept that people knew very little about. Because of this, there was no sense of context by which to predict that e-commerce and tech companies could fail so tumultuously.
Of course, now when we look back in 20/20 hindsight on that financial debacle, most people would agree that the calamity that bubble-burst created was something we should have seen coming. Similar black swan events would include the fall of the USSR and the attacks of September 11th. However, Taleb does concede that what designates something as a black swan event can be a matter of debate and opinion.
And now we find ourselves in the middle of the COVID crisis, an event which many are already calling a black swan event.
But is it really such?
There is, of course, no doubt that it has been (and will continue to be) an event of massive global repercussions but may not have been entirely unpredictable. While nobody expects a pandemic to occur given the infrequency with which they happen, they nonetheless do happen.
Most governments have agencies designed to prepare for outbreaks of this nature, in the unlikely event that they do occur. While the exact nature of this particular pandemic may not have been something we could have foreseen, the idea of a pandemic itself was, by no means, unthinkable. There have been plenty of films and television shows that do a very good job of portraying what life would be like under similar conditions (zombies or not).
Regardless of whether or not you consider the COVID-19 pandemic to be a black swan, the important question is whether investors can protect themselves against seemingly unpredictable events.
The answer is, to a certain degree, yes. Obviously, it is impossible to envision every possible worst-case scenario and have a ready-made strategy for dealing with these hypotheticals. However, discussing your finances and your investment portfolio with a trusted financial expert like Richard Meyer Cayne of Meyer International gives you the advantage of how to best plan for the unlikely, but nonetheless possible, situation of disaster striking while at the same time giving you the best possible strategies to protect your investment portfolio. Black swans may be unpredictable, but the financial blow of these events can certainly be mitigated through proper preparatory measures.
Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning solutions for decades. Originally from Quebec, Canada, he later relocated to Tokyo, Japan where he met his lovely wife Akiko Cayne and now resides in Bangkok, Thailand. While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth, he has also been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning . His image worldwide has been sterling and he maintains a firm command and understanding of all things finance-related.
