Well-designed risk-management models can help in anticipating and controlling known risks. Unfortunately, our world is increasingly being shaped by low-probability, high-impact events that are almost impossible to forecast—events dubbed “Black Swans” by Taleb. Rising complexity and interrelatedness of... [read more...]

Recent events have reminded us once more how often and how badly business and economic forecasts go wrong. It’s when things change drastically, for better or worse, that the naked state of the Emperor’s forecasts are clearly revealed. Why don’t we do better? A major part of the explanation is that most... [read more...]

Taleb has become well known for his writings on probability, and especially “black swans”—large-impact, hard-to-predict, and rare events, also called outliers and wild cards. In this brief article, he uses that perspective to suggest some ways to avoid or minimize undesirable black swan economic and... [read more...]

Certain events (such as massive financial crises) might be rare (or used to be) and unpredictable, but that doesn’t make them unimportant. Nassim Nicholas Taleb made this point in detail in his 2007 book, The Black Swan: The Impact of the Highly Improbable. There he tried to “make people think of the... [read more...]

Can you learn to expect the unexpected? It’s not an easy skill to master, argues Nassim Nicholas Taleb in this fascinating and spirited—perhaps even brash—perspective on risk perception and management. The problem is that human brains are not well fitted to the information-rich conditions of today. We... [read more...]