Black Swan in Markets -

Covid -19

Some years go down in history as watershed years and Year 2020 is shaping up to be seminal in many ways. One
year can invalidate old normals. Black Swan Event is an outlier as it lies outside the realm of regular expectations
because nothing in the past can convincingly point to its possibility. The combination of low predictability and large
impact makes this black swan a great puzzle

Bewildered Investors

20th February 2020,1 month after 1st confirmed case of novel Corona infection on 20th January, 2020 & 1 month before declaration
of lockdown in USA, S&P 500, stock market index of 500 large companies listed in USA, nosedived. Perplexed value investors across
the globe followed the pattern. Disruptions in cross border supply chains, exceedingly volatile capital markets, and potential recession
were some of the headlines observed in financial news. Sooner, US and Indian markets recovered as investors’ confided their reaction
was disproportionate and under erroneous assumption of functional impairment.

Empirical study

We have carried research of 119 Countries/States with respect to its start & end dates of lockdown. Almost 40.3% of the territories
declared lockdown between 9th to 22nd March 2020 (i.e. during 14 days period), 31.1% territories declared lockdown between 23rd
to 26th March 2020 (i.e. during 4 days period), and remaining 28.6% declared lockdown between 27th March, 2020 to 11th August
2020 (i.e. during 138 days period). Average lockdown period was of 57.27 days.

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