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Black Swan/Black Swan Theory

A 'black swan' refers to a random unpredictable and highly influential event (upon economics, society, politics, life, etc) whose potential/significance is generally only appreciated after it has happened, and even then is commonly rationalized (by commentators and leaders, etc) to have been predictable and part of a predictable pattern of some sort, which actually is not so, or it would have been. The tendency for many people to be in denial as to the true nature of black swan event unpredictability and impact is an important part of the black swan theory itself. Examples of 'black swans' are events such as the September 11 attacks on the US by al-Qaeda; the 1986 Chernobyl disaster; and the 2008 global financial/credit collapse. Black swans can instead be of a more positive nature, for example, the invention of the internet, or the fall of the Berlin Wall. The black swan term/theory was introduced by Nassim Taleb, a highly regarded Lebanese-American professor, author and theorist, in his best-selling 2001 book Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, and reinforced by his follow-up 2007 best seller The Black Swan: The Impact of the Highly Improbable. The 'black swan' metaphor alludes to both to the rareness of black swans, and to early beliefs that the creatures did not exist - which relates to general attitudes towards the real nature of 'black swan' events. The word 'black' also suggests negative consequences, which commonly result from black swan events. 'Grey swan' is a related expression, also coined by Nassim Taleb in his books, which refers to a predicted or known event which has uncertain outcomes.

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