Nassim Nicholas Taleb - What is a "Black Swan?"

they set 4 black swans on a lake when princess diana was buried !!!

so any thing that happens that is unpredictable is a black swan? you could go as far to say every second of life is a black swan. every second creates tons of possibilities that you dont know what you are goin to do. do i pass that guy or just stay here. that was a huge bug that flew by. ect.

No black swan is an event that is unpedictable and that has very important consequences

My impression is that another criteria for a black swan is that it (a bird, an event) also has a significant effect on our social psyche or beliefs. I think our (current) beliefs in things that are not real (e.g., 1915 era "We are a civilized world.") is what prevents us from predicting black swans. In other words, it is what we know is true but isn't that bites us in the ass.

I think he means complex systems are so chaotic that there are "hidden risks" that our simplified view does not show. When these risks, which are hidden from our models, manifest themselves this is a "black swan" event. Eg no one thought blacks swans existed for hundreds of years until they did, because evolution was more complex, extensive and chaotic than their simple models of life. Hence many finacial systems contain hidden risk. Outcome? Simplify finacial life, less debt.

Well youre getting more into the Butterfly Effect, where one small tiny seemingly insignificant event can cause a chain of unpredicted reactions. The difference is that a Black Swan is an event that grows in unpredictable consequence directly related to that one event. For example: the impacts of some religions may have been completely unpredicted (crusades, inquisitions, jihads...) but are directly related to that religion and that religion continues to produce effects.

The flap of a butterfly's wings can cause a tsunami halfway across the world but the deaths of hundreds of people become directly related to the tsunami, not the flap of the wings. I hope that helps differentiate.

Actually a tsunami is a huge wave, more likely caused by undersea earthquakes than by winds. The butterfly effect analogy is not to illustrate that the simple flap of butterfly's wing might "cause" a storm elsewhere, but that the necessary preconditions for a storm are so intangible that the tiniest and most unmeasurable change in them might make the difference to whether a storm happens or not.

It's an analogy to help us understand chaotic systems, which is widely misunderstood.

Not really.

The US drops Black Swans and eggs on people all over the world all the time...

now that information could be a black swan...or could be an african american swan ?

Well with all due respect history has been pretty darn good so far at predicting quite a few human initiated problems and outcomes, it may not be infallible, but its pretty darn good on an appropriate timeline