Watch Video
A black swan is a remarkably uncommon occurrence with serious repercussions.
Even if many people incorrectly assert after the fact that it should have been expected, it cannot be foreseen in advance.
Even the adoption of comprehensive modeling cannot stop a black swan occurrence, which can have disastrous effects on an economy by harming markets and investments.
By spreading risk and providing a false sense of security, reliance on conventional forecasting tools has the potential to both underpredict and increase vulnerability to black swan events.
The Black Swan, a book by Nassim Nicholas Taleb, popularized the phrase.
The last major characteristic of a black swan is that because it was a significant historical event, people are eager to explain it and make predictions about how it may have been foreseen. Such retroactive speculation, however, is ineffective in foretelling black swan events because they can range from a credit crisis to a war. One of the most recent and well-known examples of a black swan occurrence is the collapse of the U.S. housing market during the financial crisis of 2008. Only a few outliers were able to foresee the devastating and global effects of the catastrophe.
