[ad_1]
The Black Swan is a concept that you can hear in business and statistics, but what does it actually mean? First, I need to clarify what it is not. It does not just mean rare. Yes, it is a rare event, but something else is required. It is a rare event when an event occurs that was never expected to occur and that would result in a paradigm shift.
To give you an example, it was believed that swans are black could never. The term was thought to be almost like an oxymoron. To refer to something as such would be like referring to waterless flood. While in 1697 Willem de Vlamingh came across like a swan in Western Australia. This led to a paradigm shift; Black Swans present when thought they never could.
Something that would not be a Black Swan event would be to win the national lottery. Yes, it is very rare, but you expect that you could win. And if you win, it’s a nice surprise, but it does not change the way you think about or see lottery. It does not lead to a change in ideology.
What you might have figured out then you can never say something will be Black Swan event or you can see one coming. If you say that something could happen (but is unlikely to) the expression can not be used. It’s just something unlikely, and the fact that you have to consider that it means that it is part of your ideology.
The term is often wrongly used in the business. Recent decline from the sub-prime mortgage crisis was sometimes referred to as Black Swan event. It is not, as the collapse of the credit supply to them not to pay it (and derivative paper products that reduce the value of sub-prime mortgages). This was always the possibility of resulting crash sooner or later; it is part of the traditional economic theory (ideology we call).
Nassim Nicholas Taleb has written an excellent book on this event, and for those who want to understand more they should consider reading it.
[ad_2]