Black swan theory - AshokBhat/investing GitHub Wiki

A metaphor that describes an event that

• comes as a surprise
• has a major effect
• is often inappropriately rationalized after the fact with the benefit of hindsight.

The theory was developed by Nassim Taleb to explain:

• The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
• The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
• The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event's massive role in historical affairs.

• The-Black-Swan