THE BLACK SWAN-EFFECT

A?Black swan?is an unpredictable?event?that is beyond what is normally expected of a situation and has potentially severe consequences, causing extreme damages to the economy of one country or several countries or the world economy.Black swan events?are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.A Black swan event, a phrase commonly used in the world of Finance, is an extremely negative event or occurrence that is impossibly difficult to predict. In other words, black swan events are events that are unexpected and unknowable. Attributes of Black Swan Events:Taleb outlined the three defining attributes of a black swan event:1.???An event that is unpredictable.2.???A black swan event results in severe and widespread consequences.3.???After the occurrence of a black swan event, people will rationalize the event as having been predictable (known as the hindsight bias). Thus, a Black swan is a metaphor that discuss a hard to predict event or a surprise in many aspects of our society. There is also a Grey Swan which signifies an event, Known Unknowns as compared, the Black swan events, are Unknown Unknows.Unpredictable events are actually much more common than people think with wide spread consequences.It normally refers to an extremely rare negative event,.Never deny a Black swan event, as it happens to anyone. Plan for the worst, Black swan effect, even for you, individually.Point to note based on Black swan events, is, what is proved right today, may not hold good forever, it may prove wrong tomorrow and vice versa is also true. Examples of Black swan events, that were least expected with huge damages to the world and the economies, that literally shook the World:1.The spread of internet 2 9/11 Attacks-USA 3.26/11 Attacks-India4.Beginning July 1997, a series of currency devaluations;5.March 2000-The DOT. Com crash. 6. September 9th,2001-The World Trade Twin Towers were attacked .7.September15th 2008-Lehman Brothers filed for bankruptcy. 8.2009 December European Sovereign Debt crisis. Spain, Portugal, Greece and Ireland suffered huge debt to GDP.9.March 11,2011-FAKUSHIMA Nuclear disaster-10.June 14th2014 OIL Crisis-over supply of Crude OIL and from 5 Million Barrels a day in 2008 to 8.5 Million barrels a day, in 2014!! prices drop from $110 to $50/.11.The Tsunami on 26thDecember 2004.14.2020-2021 CORONA VIRUS (COVID-19)the pandemic,is the, Black Swan effect which effected every country in the world, without exception, with thousands of ?deaths and no one expected it.Thus, in conclusion we can say that just because we have seen only white swans does not mean that there are no Black Swan. Just because a certain even has not happened does not mean that particular even will never occur. So, one and all should expect the most unexpected and be prepared for the same.