If you took away the ten best days of the stock market’s history over the past 109 years, two-thirds of the cumulative gains produced by the Dow Jones Industrials would completely disappear. Conversely, if you avoided the ten worst days of the market’s performance over the span of its history, you would have tripled the actual return of the Dow.
Surprisingly, those market-changing events represented just .03% of the market’s history: 10 days out of 29,694. As Jason Zweig discussed in his January 24, 2009 Wall Street Journal article, “Why Market Forecasts Keep Missing the Mark,” history shows us that most of the time the market kind of bumbles along rather quietly. And then, when no one expects it, there is a giant gain or loss. Afterwards, the market settles back once again into its less dramatic track.
Zweig compares the behavior of the stock market with philosopher and trader Nassim Nicholas Taleb’s Black Swan theory, which says that life will periodically be interrupted by earth-shattering events that are hugely important, rare, and unpredictable. The label comes from an old philosophical argument: you might believe that all swans are white, but no matter how many white swans you see, you can never prove it is true.
On the other hand, you only have to observe one single, unexpected black swan to disprove it. Black Swan events, by definition, are enormous and staggering, but afterwards we all think that it should have been anticipated somehow. Couldn’t we have prevented 9/11? The Titanic disaster? The great credit market meltdown of 2008? I mean, the signs were there all along! Any nincompoop should have seen it coming, right?
According to Taleb, life is filled with unpredictability even though we are always surprised when it happens. The harsh reality is that we are very bad at predicting anything accurately, despite all the after-the-fact analysis that says we should have known better. Almost everything significant and life changing that happens — in world events or in your personal life — is considered a black swan event.
Those few dramatic swings of the stock market would also be considered Black Swans. No one could have predicted when they would happen, and we can only really understand why it happened after the fact. That is the reality of the stock market.
That unusual market behavior and the Black Swan theory reminded me a lot of the trajectory of my career path over the past twenty years. It goes something like this: nothing, nothing, boring, hard work, minor breakthrough, work, tedious, nothing, setback, routine, nothing, and then, suddenly – BAM! Out of the blue, a major can of whoop-ass is delivered to my door.
Some crisis or opportunity shows up, and everything changes. I have to respond. Once it was a call I received announcing that I was getting laid off. Another time it was a public speaking event I delivered that went horribly wrong. Another time it was a boss who turned apathetic towards me almost overnight. On the surface, each of these events might seem like moments of failure, but it was in how I responded, and what happened next, that proved to be launching points for my career into another realm entirely.
These Black Swan moments happen to each of us at various points throughout our lives and careers. There will be few, but very significant opportunities when you least expect it and suddenly all of your future seems to hang in the balance. How will you respond? What will you do?
These are the moments that define your future, the situations that will be branded forever as turning points in your life. These are the make-or-break situations that God is always preparing us for, even when we don’t know it.
One Friday evening many years ago, I got a call from my boss, crying. She told me that her boss, two layers of management above me, had just informed her that he was laying off our entire department within the company, and that there was nothing we could do about it. I would be getting a call from him shortly, she said, between slobbering glurps.
I looked over at my wife, who was very pregnant with our first child. We had just moved to a larger apartment to make room, paying a much higher rent than we had been used to. Plus, we were saving for a down payment on a house. This job was important to me.
Okay, I’m thinking to myself. First of all, my boss is crying like a little baby, and she’s falling apart. Losing a job is hard, but her hysteria didn’t win her any points in my eyes. Second, it is my boss’s boss who will be calling me. Hmm.
His name was Bob. I had seen him around from time to time, but I didn’t really know much about him. By the same token, he had no idea who I was or what I was working on, either. So this phone call from my boss’s boss about a corporate layoff would almost be like our first real introduction. How ironic.
Before she finished with our sad exchange, my boss cursed him out like a drunken truck driver and then made a few bitter parting remarks. “We’re all going,” she said. And with that she hung up the phone. My whole department was getting the hatchet, and that was that. I waited for the call from Bob.
Back then I was a young, aspiring guy in my late twenties working in business development. The company I was working for had hired me to open up a new market for them. I had been at it for almost a year and was just starting to gain some serious traction with some very lucrative clients on the horizon.
Bob was too far removed to know anything about this. He barely knew my name. There were several big opportunities on the verge of breaking which hadn’t yet surfaced to the higher-ups. I knew this was going to open up an entirely new source of revenue for the company in an untapped market that they had been hankering after. I was sure Bob knew nothing about any of this yet.
A few minutes later the phone rang again. It was Bob. He started out with his canned speech about the layoff. When he paused for a second to catch his breath, I very calmly asked, “So you want me to cancel my appointments next week with companies X, Y and Z?”
I knew he would perk up when I mentioned those corporate names. I pronounced each syllable of the brands ever so precisely, so that they would bubble up through the phone line and pop right next to his ear.
“We are ready to sign the contracts next week,” I told him. I was tossing out pieces of information to him like raw meat to a rabid wolf. It wasn’t BS, either. The timing was just so.
On the other end of the line was stunned silence. He wasn’t expecting this. Bob had just made about ten calls with screaming, crying, angry recipients on the other end. He didn’t quite know what to make of my enticing business prospects. I had thrown him a curve ball, and it landed squarely in his lap.
“Um, okay, that sounds interesting. You say it’s next week?”
“Yeah. And I can’t close this deal if I’m not working for you. How about I come in and meet with you Monday morning to tell you more about it before you make a decision?”
“Sure, that sounds good. See you Monday at 9 a.m.”
No histrionics, no foul-mouthed vengeance, no slamming phones. All I knew was that this guy really needed to know what he was walking away from.
That night, my wife and I spent the entire evening praying, strategizing, and role-playing like two attorneys building a case to justify their very lives. We went to bed around 11pm and then an odd thing happened. At exactly 2:15 am, each of us woke up at the same time. We turned to look at each other, and in a moment of clarity and absolute certainty I whispered to her, “I’m not going to lose my job!" She whispered back, "I know!"
We went back to sleep. In spite of all the evidence to the contrary, we both knew what was going to happen. It was weird. It was like this certainty and confidence beyond any doubt that I knew God’s plan for my life at that exact moment. This all happened on a Friday night, and the next morning we woke up relaxed and enjoyed the rest of the weekend.
The following Monday, I met with Bob at his office and very calmly began to present the business case that he was about to miss out on. After just two minutes he started waving his hands at me, saying, “You’re not laid off. Pretend you never got that call. So. Go on." My business development work was apparently the best kept secret in the company. It turned out I was the only one in my department not to get laid off.
Without knowing it, God had been preparing me for that moment. The development work I had been doing up until that time had not produced any major results, but it was just about to take hold. In addition, my previous job was a sales position that had prepared me to think on my feet in stressful situations, maintaining my composure in front of very intimidating circumstances.
All of these experiences together over the past four years had prepared me for that very moment. By God’s mercy, I didn’t screw it up.
I went on from that fateful day to build a successful business unit for my company over the next several years. Bob became very interested in my work. The results I produced for him then laid the groundwork for my next big move, then the one after that, and the next one after that. The rest, as they say, is history. My history.
What will your history be? Each of us will face these significant moments in our lives and careers that, depending how we react to it, will determine the fate of our future for many years to come. These are the defining moments of our lives. Everything that is going on during the in-between times — however difficult, boring or tedious — could actually be very important in the long run.
Think about it. God is preparing you for something big.