<P> Taleb's problem is about epistemic limitations in some parts of the areas covered in decision making . These limitations are twofold: philosophical (mathematical) and empirical (human known epistemic biases). The philosophical problem is about the decrease in knowledge when it comes to rare events as these are not visible in past samples and therefore require a strong a priori, or an extrapolating theory; accordingly predictions of events depend more and more on theories when their probability is small . In the fourth quadrant, knowledge is uncertain and consequences are large, requiring more robustness . </P> <P> According to Taleb, thinkers who came before him who dealt with the notion of the improbable, such as Hume, Mill, and Popper focused on the problem of induction in logic, specifically, that of drawing general conclusions from specific observations . The central and unique attribute of Taleb's black swan event is that it is high - profile . His claim is that almost all consequential events in history come from the unexpected--yet humans later convince themselves that these events are explainable in hindsight . </P> <P> One problem, labeled the ludic fallacy by Taleb, is the belief that the unstructured randomness found in life resembles the structured randomness found in games . This stems from the assumption that the unexpected may be predicted by extrapolating from variations in statistics based on past observations, especially when these statistics are presumed to represent samples from a normal distribution . These concerns often are highly relevant in financial markets, where major players sometimes assume normal distributions when using value at risk models, although market returns typically have fat tail distributions . </P> <P> Taleb said "I don't particularly care about the usual . If you want to get an idea of a friend's temperament, ethics, and personal elegance, you need to look at him under the tests of severe circumstances, not under the regular rosy glow of daily life . Can you assess the danger a criminal poses by examining only what he does on an ordinary day? Can we understand health without considering wild diseases and epidemics? Indeed the normal is often irrelevant . Almost everything in social life is produced by rare but consequential shocks and jumps; all the while almost everything studied about social life focuses on the' normal,' particularly with' bell curve' methods of inference that tell you close to nothing . Why? Because the bell curve ignores large deviations, cannot handle them, yet makes us confident that we have tamed uncertainty . Its nickname in this book is GIF, Great Intellectual Fraud ." </P>

What does black swan mean in stock terms