Very few people truly understand what a Black Swan is.
Most just see a rare event or a large, sudden shock and immediately label it a Black Swan.
But that’s not how it works.
Nassim Taleb — the author who popularized the concept — is openly frustrated by this careless usage.
According to him, it dilutes the warning power and the seriousness of the idea.
He has even mocked the financial and media world for mislabeling countless events as Black Swans.
Taleb said:
“If you can imagine it, then it’s not a Black Swan.”
So what is a real Black Swan?
According to Taleb, a true Black Swan must satisfy all three conditions:
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It cannot be predicted using past data or existing models
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It causes a massive systemic impact, reshaping the way we understand and operate in the world
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It is only rationalized after it happens — meaning it was entirely invisible beforehand
If an event is surprising and has a large impact, but was already warned about or imaginable in advance, then it’s not a Black Swan.
It’s a Gray Swan.
Gray Swans may also be dangerous, but they are simply rare — not invisible and not fundamentally unpredictable.
A Black Swan is both invisible and unpredictable — until it happens.
This is also why, in Trading the Unknown, I rarely call extreme events “Black Swans.”
Because most things we label as Black Swans are, in fact, just Gray Swans — natural outcomes of a world that is nonlinear, uncertain, and governed by fat-tailed distributions.
The 2008 financial crisis? A Gray Swan.
Many had foreseen the collapse of the subprime mortgage market. Most people just didn’t want to listen.
COVID-19? Also a Gray Swan.
WHO, Bill Gates, and numerous public health experts had warned early on about the risk of a global pandemic from a novel virus.
Yes, these events were rare and disruptive — but they did not satisfy the first condition: unpredictability.
And most of the other market shocks you see?
They don’t even qualify as Gray Swans.
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A stock dropping 80%
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Oil going negative
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Coins crashing 80–90%
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Trump tweeting and sending the market into panic
These things may sound wild, but they don't fundamentally reshape the system.
And they’re not outside expectations if you understand how the real world operates — nonlinear dynamics and fat-tailed risk.
So if those aren’t Black Swans… what the hell is?
Let me say it again:
A Black Swan is something that:
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No one thought of
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Didn’t exist in any forecasting model
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And once it hits, it changes the entire system — and we only understand it after it’s done
In real life, we may not have truly encountered a pure Black Swan yet.
And that’s exactly what makes it dangerous.
When it shows up, no one is ready.
You only realize it when it’s already done its work.
Still, there are a few events that could qualify as Black Swans:
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9/11: No one imagined commercial planes could be used to attack America’s most iconic structures
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The collapse of the Soviet Union: Almost no political analyst foresaw the timing or speed of its disintegration
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The rise of the Internet: From a military communication system to the foundation of modern civilization
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Bitcoin and blockchain: A whitepaper by an anonymous figure is now threatening global financial systems
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Generative AI (LLMs): Exceeding expectations, reshaping industries, and bringing risks no one knows how to control
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A nonlinear climate scenario: A sudden tipping point outside all current models, leading to irreversible collapse…
A Black Swan isn’t always loud.
It doesn’t always arrive with a bang.
It might not cause immediate visible damage.
Sometimes, it creeps in silently — eroding the old system until everything you trusted is no longer there.
Understand Black Swans properly — or risk being destroyed by your own misjudgment.
Don’t label every shock as a Black Swan before you truly understand it.
Doing so only makes you more complacent toward real uncertainty.
Always remember: the Black Swan is invisible.
It’s the thing you never saw coming — until it slaps you in the face.
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