The Black Swan Theory

The Black Swan Theory, popularized by Nassim Nicholas Taleb, describes rare and unpredictable events that have significant consequences. These events are often rationalized in hindsight, making them seem expected. For example, the 2008 financial crisis was a Black Swan; few anticipated it, but it had profound effects globally. The theory emphasizes the limits of our knowledge and the importance of being aware of the unexpected, encouraging resilience and adaptability in both personal and financial decisions. In essence, it teaches us to prepare for the unknown rather than relying solely on past patterns.