Tag Archives: Financial Planning

Black Swans, Nuclear Disasters and Your Portfolio

by Mike


No, I’m not talking about Natalie Portman and her baby bump.

I’m talking about a very interesting idea of how humans think about (or, more to the point, don’t think about) huge, life-altering but infrequent occurrences that are typically outside everyone’s expectations.

The phrase originates from the Roman poet Juvenal who lived in the late 1st and early 2nd century BCE, who wrote:  “rara avis in terris nigroque simillima cygno,” which loosely translated means “a rare bird is in the lands, and very like a black swan.”  Because no English person had ever seen a black swan, the saying gained currency in 16th century London as a statement about impossibility, until black swans were discovered in 1696 in Western Australia.

The concept was re popularized in 2007 by the author  Nassim Nicholas Taleb in his book, The Black Swan.  Taleb argues that huge, life-changing phenomena like World War I, personal computers ,the  Internet, and 9/11 are black swan events.   Continue reading