When the black swans chase away the bulls

A look at the vocabulary of financial turmoil.

Kirsty Wigglesworth/AP
Kate Summers, Christie's Head of Sale for the auction strokes a model of a unicorn, Equus Caballus, during a press preview at Christie's auction rooms in London in 2015.

A silver lining in the market turmoil of recent weeks – let’s hope it settles down by the time you see this, dear reader – is that such upheavals let word lovers review some of the colorful vocabulary used in financial markets. (And no, I don’t mean just things like “@#$%&!”)

In a recent BuzzWord post, Kerry Maxwell, at the Macmillan website, led with unicorn

For centuries, a unicorn was an imaginary single-horned horse. Its native habitat was the tapestry. There was a semantic neatness to unicorn that pleased lexicographers: one word, one clear meaning. Unicorns did not actually exist, but at least everyone knew what they were.

But that’s changed. Unicorn is now “the accepted description for a newly started company, usually no more than ten years old, which has come to achieve a valuation of $1 billion ... or more,” says Ms. Maxwell.

So now imaginary unicorns share dictionary space with financial ones. Venture capitalist Aileen Lee gets credit for this new sense of the word.

And since a billion dollars isn’t what it used to be, we’re now hearing about decacorns, imaginary horses with 10 horns, to refer to start-ups worth $10 billion or more.

I feel like drawing a line here. A 10-horned horse is imaginary even within the realm of fantasy. 

But what about other animals? Bulls conventionally are the mascot for market optimists and bears for pessimists. A recent cover of Bloomberg Businessweek featured a “group photo” of bears of various colors and sizes. It didn’t take much explaining.

Then there’s the deer market. The metaphor there is the proverbial “deer caught in the headlights” of a car, immobilized with fear. WiseGeek explains that deer market investors typically “do not initiate much buying, selling or trading of stocks and bonds.”

And the black swan: Some dictionaries define it first as, well, a swan with black feathers. In the financial sense, it’s “an extremely rare and unexpected event that has significant consequences,” as Word Spy puts it. 

This usage is credited to Nassim Nicholas Taleb’s 2001 book, “Fooled by Randomness.” Word Spy offers a vivid example, from 2011, rooted in events now in our rearview mirror: “Black swans are, of course, those highly improbable but painfully consequential events that strike from the blue – or from the streets of Cairo, or from an offshore oil rig, or from a poorly designed car part.”

There’s an older sense of black swan, though. The Oxford English Dictionary has an example it traces to 1398: “no man findiþ [findeth] a blak swan.”

In 14th-century England, a black swan was as rare as a unicorn; that is, nonexistent. The black swan that is an actual bird is found in Australia, though it has been introduced elsewhere. Now we have “real” unicorns, creating wealth, and “real” black swans, wreaking havoc. Let’s hope we have enough of the former so that the latter don’t chase all the bulls away.

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