Butterfly Effect

Parent term
The Butterfly Effect postulates that small changes in one place can lead to significant changes elsewhere

Butterfly Theory Basics
  • Postulates that a small changes in one place can lead to significant changes elsewhere
  • Typically the larger changes occur over a period of time
  • There is not a clear path from the small change to the big change
  • Changes cascade from one to the next in a chaotic manner

Extreme Examples To Illustrate the Butterfly Effect:

Butterfly Effect Connection to Finance & Investing 
  • Markets and all their actors are interconnected and not predictable