How to deal with "black swan" events
Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Blue Fox Notes (ID: lanhubiji)
Blue Fox Notes (ID: lanhubiji)
, reprinted by Odaily with authorization.
The term "black swan" was coined by Nassim Nicholas Taleb, a former Wall Street quantitative trader. After the 2008 financial crisis, the term black swan was widely used.
According to the survey, the definition of a black swan event is:
Black swans are unpredictable events that fall outside the expected range of normal circumstances and can have serious consequences. Black swan events are so rare and high-impact that trying to predict them from a summary of failures is foolish in hindsight.
In my opinion, what is typical of black swan events is that they are "...characterized by their extreme scarcity...". Let's take a look at some "black swans".
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Coronavirus: The 2020 black swan that Sequoia says
On August 8, 2014, the World Health Organization declared the Ebola virus outbreak a public health emergency of international concern. From 2013 to 2016, more than 1,100 people died from Ebola.
The "Hong Kong flu" was first identified in Hong Kong in early 1968 and spread to the United States later that year. In 1968/1969, approximately 1 million people were killed worldwide, including 34,000 in the United States.
In 1967, the World Health Organization estimated that about 15 million people were infected with smallpox, and about 2 million people died of it that year.
You can continue to write now. But epidemics are not black swans that happen infrequently. They happen all the time.
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investment black swan
"Economic downturns or crashes, such as Black Monday, the stock market crash of 1987, or the dot-com bubble of 2000, are all relatively modelable"—thus, they are not black swans.
"...But the September 11th attacks are very rare. Also, who would have predicted the collapse of Enron? As for Bernie Madoff, you can probably argue. --The first two are black The swan event, and the last one may be." (Blue Fox Note: The Madoff event refers to the largest "Ponzi scheme" in history. Madoff is a Wall Street legend and the former chairman of the Nasdaq market. The amount of defrauding customers is as high as 50 billion US dollars. This event is completely unexpected and unpredictable)
To put it more clearly, there is an article titled "Nine Black Swan Events That Changed the Financial World" in "Data-Driven Investor":
That's 9 black swan events in 20 years. This statement is contradictory. Because you can't have 9 "extremely rare" events in 20 years.
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Why do we call it a black swan?
