Black Swan

What Does Black Swan Mean?
An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader.

Investopedia explains Black Swan
Black swan events are typically random and unexpected. For example, the previously successful hedge fund Long Term Capital Management (LTCM) was driven into the ground as a result of the ripple effect caused by the Russian government's debt default. The Russian government's default represents a black swan event because none of LTCM's computer models could have predicted this event and its subsequent effects.

Related Terms

Behavioral Finance
Dividend Signaling
Hedge Fund
Long-Term Capital Management - LTCM
Random Walk Theory
Wall Street
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