Do you want to sound really smart in front of your friends who don’t give any shits about macro?
Then keep reading my friend.
Let’s take a break from the regular styles of blogs we see on here, and just do a quick tutorial.
If you’ve real the Nassim Taleb book on swans, you already know a few of these.
Pretty much what you think it is, but there is more criteria here than most people would believe, says Taleb.
A white swan event must have 3 criteria:
- Highly certain
- Its impact can be easily estimated
- Afterwards, people look for somebody to blame
Example: Higher poverty will lead to higher crime rates.
This is just me providing examples, not everyone will agree with them.
Most of you are familiar with this one too. Criteria:
- Massive Impact
- Afterwards, explained to appear less random, and more predictable
Example: I’m avoiding the obvious one (rona), and I’ll instead say Fukushima. After it happened, they tried to explain how it will happen again. I remember it. They were full of shit, but emotions were high back then, so we just believed them (classic trick).
Familiar with this one? Criteria, according to Talen once again:
- Not certain, but predictable
- Impact can easily cascade
- People look for who to blame afterwards
Example: I feel like a future Grey Swan will be the up coming financial depression as globalization ends, and countries end up paying dearly for their stupid mistakes in the past 8 years, give or take.
Now we’re getting obscure. Criteria:
- Could be huge
- Doesn’t actually happen
Example: I can remember growing up in the Midwest, there was a seismologist named Iben Browning, who predicted a giant earthquake on exactly December 3rd, 1992. We had drills in school and everything. Midwestern earthquakes are more horrifying because unlike sand on sand in California for example, it’s rock on rock. The last big one caused the Mississippi River to run backwards, and completely wiped out the town of Memphis. The predicted earthquake in 1992 never happened of course.
Pretty much what you think it is. Related to climate and the environment. Criteria:
- Rare and unexpected
- Far-reaching impacts
Example: Hard one, because so many people out there act like these events are a certainty, which means they aren’t “unexpected”. I guess something like Mount Rainier erupting and taking out the entire Pacific Northwest of the United States would qualify. Maybe a more climate-related example is if places like Southern Europe get massive amounts of snow and cold weather this winter. Would certainly have far-reaching impacts, if you like wine and olive oil.
Opposite of a black swan in outcome. Criteria:
- Positive outcome
Example: Advances in technology that greatly improve quality of life (if not abused). Internet, crypto, MRI, cell phones, etc. Or something like the Y2K disaster not actually happening.
We’ll finish off with the rarest one I was able to find.
Man, you’re going to be so popular at cocktail parties when you learn this one.
- Huge Magnitude
- Very predictable
Example: I dunno, Chinese presidential elections maybe? All I got.
That’s all for this week’s blog post. Hope it was at least a fun read.