Stockholm (HedgeNordic) – A Black Swan is an event or occurrence — a tail event, as Nassim Taleb would call it — that is so remote that it is completely unforeseen.
The famous example Taleb uses in his book, is the Thanksgiving turkey. “Consider a turkey that is fed every day,” Taleb writes. “Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say.
“On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.”
Here’s Taleb’s famous chart:
Picture: (c) Elena Veselova—shutterstock.com