The Black Swan

Thought experiment: Assume that you round up a thousand people randomly. If you add to the sample the heaviest human on the planet he would represent only about 0.6 percent of the total.

By comparison, add Bill Gates, with an assumed net worth of nearly $80B, and he would represent approximately 99.9% of the group’s wealth. All the others combined would represent no more than the rounding error for his net worth, the variation of his personal portfolio over the past second.

A single event can dominate some phenomena. In such matters, you should be careful of knowledge derived from data.

These matters probably include wealth, income, book sales per author, book citations per author, name recognition as a “celebrity,” number of references on Google, populations of cities, uses of words in a vocabulary, numbers of speakers per language, damage caused by earthquakes, deaths in war, deaths from terrorist incidents, sizes of planets, sizes of companies, stock ownership, height between species (consider elephants and mice), financial markets, commodity prices, inflation rates, and economic data.

The Black Swan, Nassim Nicholas Taleb

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