“If you hear a ‘prominent’ economist using the word ‘equilibrium,’ or ‘normal distribution,’ do not argue with him; just ignore him, or try to put a rat down his shirt.”
– Nassim Taleb, The Black Swan
Facing the Unexpected
There was an old European belief that persisted for centuries. People were convinced that all swans were white. Their reasoning was founded in logic and supported by empirical evidence.
Every single swan they’d ever seen was white. It was a universal truth. A rock-solid assumption based on all the available evidence.
But then, in the late 17th century, a Dutch explorer found black swans in Australia. The one-time truth that all swans were white was instantly shattered. The existence of black swans showed how fragile knowledge and assumptions can be when faced with the unexpected.
Nearly 20 years ago, in his book The Black Swan, author and options trader Nassim Taleb described a Black Swan as an event that comes as a complete and utter shock. Something that nobody saw coming, which has a massive, widespread impact. What’s more, after it happens, we look back and convince ourselves that it was totally predictable all along. Continue reading







