The Black Swan (2007), by Nassim Nicholas Taleb, is the book I want to bring around as I look down from the ninth floor of a centric hotel in Buenos Aires, city in which we are studying the module named “doing business in Latin America”, part of the Global MBA program. My collegues from the EOI Business School and myself are enjoying the experience of joining some clases at ITBA (Instituto Technológico de Buenos Aires) during 2 weeks, in order to deeper understand the singularities of this market. Some of these singularities, in my opinion, has a lot to do with the beautiful book by Mr. Taleb.
Before the discovery of Australia, no one could ever imagine that swans could be of any other color but white. There was a conceptual link between the white colour and swans, as it was between “bird with feathers” and swans. When the first colonizers arrived to the island and met with the black subspecies, millennia of confirmation regarding colour of swans was destroyed. The problem here, is that no one could rule out the black swan from the logical equation since they hadn´t seen one. In a simpler way, you can´t forecast what you can´t imagine. These kind of unespected events are what Mr. Taleb named Black Swan events. The most interesting thing is that major events in history of mankind have been Black Swans: First and Second World War, Google, Pcs, 11-S, and so on. As we are learning, the history of Argentina has been full of Black Swans: military coups, huge crisis, monetary depreciations, major corruption cases…
All these, has led to a continuous state of uncertainty both in business people and society, situation that is really shocking for someone used to the virtual steadyness that the EU promises to us: no Black Swans in the horizon. Here, on the other hand, doing business means short term investments and not long break even period; saving money, a dangerous bet. A friend of mine, argentinian, didn´t understand well my intention of moving to Northern Europe for a few years after finishing my master, with the intention of coming back afterwards. He said something like “and what if the entire world goes to hell and catches you in Denmark“. That´s how uncertain they are about the future.
But they survive, they keep going, they told us that “one gets used to live in this state of uncertainty”. The forecasted growth for Argentina this year is 5%. Let´s say that they have learned how to ride the perennial Black Swan that is their history. And we have to understand this fact both for making business in Latin America, and to get rid of tight forecasts on economy and markets.
After all, everybody knew for sure that swans were… white.