Black Swans, Purple Cows, colorful animals..
The idea that something big and unexpected could happen without notice is a joke. At this point in time, if you don’t expect big and unexpected things to happen without notice, then you aren’t really paying attention in the first place. This is why I don’t understand big banks, agency ratings and their financial models (besides the fact that I don’t really understand big banks, agency ratings and their financial models).
The financial crisis, BP’s oil mega-mis-step, earthquakes, wars…
These are all things that we know will happen, in some way, shape, or form. But now that we live in a highly interconnected world, the likelihood of these events happening are much greater and will be much more frequent. In fact, during the financial crisis, three kids (now known as Cornwall Capital) took $100k and bet it on these “rare” events. They turned $100k into $15M which they then turned into $120M.
They essentially bet on “black swan” events.
In today’s world, mini-black swans will occur almost daily. We’ll call these “rainbow swans.”
Take for example these two recent “tweets” by Alyssa Milano.
The first was:
Well, shortly after, she tweeted this:
With nearly 850K followers on twitter, she was able to move a relatively large mass of people, at a specific moment in time, to a relatively unknown website. To that website owner, he has no doubt experienced a mini black swan, now unofficially known as a, “rainbow swan” event.
How was Brennan supposed to know that Alyssa Milano would be in the mood for a hemp-jacket wearing Jar-Jar Banks?
Related articles by Zemanta
- Nassim Taleb on the Crisis (freakonomics.blogs.nytimes.com)
- Op-Ed Columnist: This Time Is Different (nytimes.com)