Question
Black Swan events, as described by Nassim Nicholas Taleb, are unpredictable events that have massive impact on the market and are rationalized by hindsight. Some examples include the 2008 financial crisis, the dot-com bubble burst in 2000, and the COVID-19 pandemic. These events were not predicted by the majority of market participants and had significant effects on global economies.
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In fact, said Buffett, the market is far from efficient because investors can exploit gaps between price and value. What's more, fund managers often buy and sell based on greed or fear, not on rational and fully informed decisions. In 1999 Yale economics professor Robert Shiller published the book Irrational Exuberance in which he showed that the market regularly behaves irrationally. Nassim Nicholas Taleb then weighed in with his book, The Black Swan, arguing that the market is neither random nor unbeatable; supposedly impossible Black Swan events actually happen quite regularly.
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