A black swan event is a metaphor that describes an event that comes as a surprise and has major consequences.
Today, such an event occurred causing the Swiss franc to soar as much as 30% and gold to jump to 4-month highs in chaotic trading after The Swiss National Bank (SNB) abandoned the cap on the currency's value against the euro.
The Swiss National Bank (SNB) said the cap, introduced in September 2011, was no longer justified. No one predicted, hinted or even contemplated that The Swiss National Bank would do this.
This move could well begin the demise of the euro that was cobbled together some 15 years ago. Personally, I am surprised to this day that this currency has survived as long as it has. The disparity between the work ethic of a country like Germany versus Greece is a joke - yet that is what the euro represents.
A Flight To Quality
As the Russian ruble continues to lose buying power, money is flowing into Switzerland from that country. I remember when I lived in Switzerland, flights used to arrive with passengers whose suitcases were stuffed full of illegal money. Make no mistake about it, this move by the Swiss National Bank is a game changer.
Investors in Europe have long believed in the value of gold. Today's move in gold to 4-month highs underscores that belief. Gold has long been seen as a traditional safe haven out of paper money, and today we are seeing this all take place in real-time.
I have been bullish on gold since I posted a special report on January 7th. I continue to look for this market to reach my initial target zone of $1,340.
How Are We Doing With All This Market Volatility?
I thought it would be interesting today to look at one of the three model portfolios and see how that portfolio is performing with all the recent volatility we have seen. This is the very same portfolio that outperformed 18 of the top 20 billionaire hedge fund managers last year.
In today's video, I will share with you exactly how we are positioned in the market right now. You might be surprised to see why we are holding certain positions and not others in this ever fluctuating volatile market.
Just in case you missed yesterday's video, here is the link to download my free iBook, "5 Professional Trading Rules That Will Make You Successful In Any Market!". This booklet is a free download on an iPad or any Mac running OS Maverick or higher.
If you have an Android tablet, no worries, we have a PDF version for you.
We are always looking to improve MarketClub and that is why your feedback is so important to us. Let us know what you think of today's post and this particular portfolio's approach.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
At this juncture, from every point, inclusive of so called analysts and economists, people are just thinking about either strength of Franc or Dollar or weakness of Euro or Rubble etc.etc.
However, we must consider and evaluate this situation as a whole, without any simple basic criterion like gainer or looser or strength or weakness of any specific financial area because present situation is just like the Fire of Forest. When fire take place, it is from any single point or tiny area, but latter through the spread, it catch whole forest.
Same thing also applied to our "Financial Forest" it may either any Country or Currency or any other markets, they are exists so co-related, inter depended and fully connected with each other in a very strong unavoidable format, that we can't think over to decouple them, so as far as any immediate, initial or short term impact is concern, we may found something as a gainer and something as a loser, but final or ultimate impact and consequences will be very wide spreaded, and except minor difference, nothing will found in a fully safe or unaffected manner, and this probability is also applying without any exception.
I think you're absolutely right. The thing is, we're living in very perilous times economically and financially, so many people are looking for supposed safety to which they might flee with their assets, and for the time being currencies such as the US$ and the Swiss Franc are the current holders of "healthiest horse in the glue-factory corral" status.
Dear venuspluto67,
Thanks for feedback.
Your observation is so true and applied that i got some more direction to think.
Thanks for the 411, I was wondering what was making good ol' aurum do the "Little-Engine-That-Could" thing today. The euro has another seriously big problem. A country can go into quite a bit of debt just as long as it can borrow in its own currency, the USA being a case-in-point. The reason so many European Union countries, including foundational members such as France, are having such a horrific time with debt is that the Euro currency, by virtue of belonging to all those sovereign nations, also at the same time belongs to none of them. So euro governments that borrow money are essentially having to do so in another country's currency, for all practical purposes. What a mess!
And speaking of Black Swan Events, the doomer in me can't freaking *wait* to see what happens once Greece gets taken over by a quasi-communist party at the end of this month. Go, Big Red! 😀
Hard to see how the "commies" could do any more damage to Greece than the capitalists already did.
The commies end up shooting,starving,people
I'm thinking of what might happen if Syriza wins and decides to tell the European Central Bank to step off.