Keywords:: PermanentNote makePublic shared
Reference:: R: The Black Swan by Nassim Taleb
Black Swan is a phenomenon that is an outlier, has an extreme impact, and seems predictable in retrospect (although it isn't).
The astroid that killed the dinosaurs was a Black Swan; the French Revolution was a Black Swan; the Great Depression was a Black Swan; WW2 was a Black Swan; the internet was a Black Swan; the Corona virus was a Black Swan.
When you're aware of Black Swans, what you don't know becomes way more relevant than what you know. Why? Because of their extreme impact, one occurrence can invalidate the general assumption derived from millennia of confirmatory sightings of millions of white swans.
One asteroid impact can invalidate the assumption that the earth is a safe place derived from millions of years of no impacts. One murder can invalidate the assumption that the guy you see every day at the grocery store is a normal dude derived from hundreds of sightings of friendly behavior at the store. One financial crisis resulting in hyperinflation can invalidate the assumption that your money is safe in your bank account after years of stability. One bad tweet can invalidate someone's reputation built for years. A news that classmate became a millionaire because of selling as successful business can invalidate your assumption of him being a lifeless loser after years of seeing him avoiding parties, dressing funnily, and being awkward (although it's not a Black Swan to the nerd). And so on.
Black Swans aren't universal—i.e. to one person something might be a Black Swan, and to another not. The sudden success of your lifeless loser friend will be a Black Swan to you but not to him because you haven't seen the hours of work invested into his venture every day for a couple of years. The "sudden" success of a comedian will be a Black Swan to you but not to the comedian because they're worked tirelessly for 10 years behind the scenes. Death will be a Black Swan to the chicken but not the man who killed it for dinner.
What's more, the rarer the Black Swan, the bigger its impact. The more unexpected success of a business, the smaller the number of competitors, and the more successful the entrepreneur who implemented the idea. The more surprising a war outbreak, the more deadly it is (we were sure there wouldn't be a greater war than WW1 called "The Great War"—then, WW2 happened).
What's worse, we can't predict them.
The most important thing Black Swans teach us is that impact is more important than probability. Therefore, we need to adjust to their existence instead of naively trying to predict them. In short, increase your exposure to the positive kind of Black Swans (while keeping a safety net) and avoid areas where Black Swans that can kill you exist.
Relevant notes (PN: )
According to Taleb, almost everything in the world that has a significant impact (both positive and negative) is Black Swan. Therefore, if you want to succeed, you need to prepare for random events. You must take Black Swans for default and act accordingly.
Black Swans dominate our reality. Because of its extreme impact, one Black Swan can invalidate all of your assumptions derived from thousands of years of confirmatory sightings. Further, if you're operating in Extremistan, most of your results will come from Black Swans of the positive kind. In other words, unless you're a hunter-gatherer, Black Swans are an imperative part of your reality.
Extremistan is asymmetric and hard to predict—inputs are distant from and can lead to massive outputs. Most of the wealth is ending up in the hands of the few; a writer is publishing books for 10 years without results and suddenly his next book becomes a hit, making him a millionaire; there are 100 years of peace and all of the sudden the biggest war in history breaks out. Extremistan is where Black Swans rule.
However, the environment has changed. Once we introduced intersubjective concepts and information became the currency, it became increasingly more extreme, asymmetric, and surprising—Black Swans started to rule. It transformed into the world of winner takes all and extreme events that invalidate all previous observations.
As a result, we confidently but falsely create theories based on a small subset of reality ignoring or rejecting all of the rigid and messy details that either don't fit into our current narrative or which we are simply unable to compute (this is where Black Swans hide). What's worse, we are unaware of that ignorance and arrogance.