A BIG Black Swan

by Larry Emmott on March 23, 2020

in Corona Pandemic,Management

From the summary of “Black Swan” by Nicholas Taleb

The Black Swan is named after a classic error of induction wherein an observer assumes that because all the swans he’s seen are white, all swans must be white. Black Swans have three salient features:

  • They are rare (statistical outliers);
  • They are disproportionately impactful; and, because of that outsize impact,
  • They compel human beings to explain why they happened—to show, after the fact, that they were indeed predictable.

Taleb’s thesis, however, is that Black Swans, by their very nature, are always unpredictable—they are the “unknown unknowns”for which even our most comprehensive models can’t account. The fall of the Berlin Wall, the 1987 stock market crash, the creation of the Internet, 9/11, the 2008 financial crisis—all are Black Swans.

Add to this the Corona Virus pandemic of 2020, a bigger Black Swan than all the others.

No one was prepared for this, no one knows what to do, no one can predict what the final results will be.

However having a robust high tech infrastructure in your practice will help you cope. More to come.

 

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