What is meant by crises and what cannot be regarded as crises

Crises are a significant challenge. A crisis is defined as a difficult situation, location or time that marks the peak and turning point of a dangerous development. But why do crises have such a profound influence on us? Crises are by definition unpredictable and always contain an element of surprise, which is not necessarily what most people doappreciate of us.

The “Black Swan” – the surprise element

The Black Swan – the surprise element often leads to the “perfect storm” in which a crisis can fully develop. When events occur that are neither anticipated nor perceived by the majority of market participants as a threat, a chain reaction is created from impulsive measures that give the crisis its energy. The stockbroker, statistician and financial authorNASSIM Nicholas Taleb has shaped an impressive metaphor for this: the “Black Swan”.

Importance of the Black Swain

Taleb describes a “black swan” as a rare, extremely unlikely event. Since only white swans were known in Europe in earlier times, the image of the “Black Swan” symbolized something impossible for a long time. With the discovery of black swans in Australia, this dark bird became a metaphor for something extremely unlikely that can still occur.

Why we react unprepared to black swans

Precisely because such extremely rare outliers have serious consequences, we tend to look for plausible explanations for these unpredictable crises afterwards. Since crises question our self-perception (“Wasn’t I should have foreseeed that?”, we are constructing a story that seems to be logically explaining that everything had to come as it happened. unfortunatethis story is a fallacy. Because the essence of an event called “black swan” is its unpredictability. We couldn’t have known better. We can only adapt our spontaneous reaction to a crisis situation to act wiser next time. Because as surprising as it may be, one thing is certain: the next crisis will besafety come!

Unpredictability of crises in advance

In the run-up to a crisis, it can never be predicted how your outcome will be. The triggers for comprehensive financial changes often happen in secret. What we see as a crisis is often the result of many different economic, environmental or political developments that ultimately lead to the crisis that we are now experiencing. Think about crisesMany often remember the events that are symbolically connected to them. Such moments then go into historiography: The bankruptcy of Lehman Brothers, the assassination of the Austrian heir to the throne Franz Ferdinand or the Black Thursday are the outstanding gems of a chain of events that attract attention with their uniqueness.

Symbolic moments and the entirety of the crisis

However, these moments are only parts of a comprehensive chain of action that led to the respective crisis. These symbolic moments triggered neither the 2008 world financial crisis nor the First World War or the Great Depression; However, they symbolize and simplify the enormous changes associated with them. Who understand the history of criseswants to be ready to deal with the whole of the story. It is important to find out what the similarities and what the differences between the different crises are.

Crises as Black Swans: Unpredictable Teachers

Since we often look for the symbolic moments in our view of crises, we often forget that crises are black swans: something that our imagination cannot exist because it has never occurred before in this form. Crises are strict teachers. Anyone who has dealt with crises more intensively through history knows about theirsUnexpected nature. They question us and put our knowledge and our security and experience to a hard test. They show themselves to be no indulgent teachers. Anyone who is not willing to seriously deal with their financial decisions and plans in the face of a crisis will have to learn quickly that a crisis can be merciless.

Fear of crises: no reason to panic

Nevertheless, even a difficult situation should not frighten us. Our fear is nothing more than an indicator – an emergency signal in a way that is in a sense of the real danger. If we can understand how a crisis is going, we have more mental leeway for appropriate reactions. For this reason, we have put together a number of exemplary crises here to both yourto clarify the resolution potential and show how quickly they could be overcome.

Crises as an amplifier and accelerators

Crises act as a ignition glass and a fire accelerator. They reinforce existing problems of companies and stocks and spark financial problems to a great fireball of failure. a little less poetically expressed: Crises intensify only a situation that would have escalated more slowly without an external tipping point. join in a crisis situationDealing with aspects that required our attention anyway can only be advantageous for us investors.