The term ‘Black Swan’ in finance refers to an unpredictable and significant event. So what does the term ‘Grey swan’ mean? We recently put this to Daniel Farley, CIO, Investment Solutions Group, for State Street Global Advisors, which manages over $3 trillion in assets globally, and asked for a few examples.

Dan prefers to use the term ‘Grey swan’ because, while unlikely, these events are still foreseeable. As a negative grey swan, he outlined the risk from the Chinese consumer, who now has more debt than the US consumer. As a positive grey swan, he outlined a contrarian opportunity in the financial sector with a powerful potential catalyst that could unleash the massive latent value.

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