Black Swan

The term "black swan" was popularized by Nassim Nicholas Taleb in his book "The Black Swan: The Impact of the Highly Improbable." A black swan event is characterized by three main attributes: it is an outlier beyond regular expectations, it has a significant impact, and it is often rationalized in hindsight as if it could have been predicted. These events challenge traditional risk management models and assumptions.

Black swan events can occur in various fields, including finance, natural disasters, and geopolitical events. In financial markets, black swans can cause massive disruptions and market volatility, as seen during the 2008 financial crisis and the COVID-19 pandemic. Such events highlight the limitations of standard forecasting models and the importance of building resilient systems that can withstand unexpected shocks.

1. The 2008 financial crisis, triggered by the collapse of Lehman Brothers and the subsequent global economic downturn.
2. The COVID-19 pandemic, which led to unprecedented health, economic, and social disruptions worldwide.
3. The sudden and unexpected collapse of a major company, such as Enron in 2001, due to corporate fraud.