Black swan and gray rhino

“Blacks swans” and “gray rhinos” refer to two very different but dangerous threats for investors.

Nassim Taleb popularized the term “black swan” through his book (es) with the same name. But the black swan theory comes from much farther and is a metaphor describing an unforeseen event that has major effects. These events are so rare that they do not enter into the computations or any kind of possible expectations; although in retrospect it seemed predictable. At the same time if one of these events strikes it will have major consequences.

Gray rhino’s concept was popularized by Michele Wucker through his book The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore. As the title phrases it, gray rhinos are troubles we see coming but nobody has prepared or has the courage to confront them. Gray rhinos are scenarios where current data show what can happen but we actively choose to ignore it.

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