Black Swans and Unicorns, Oh My
Boring numbers, staid meeting, and old men wearing over-stuffed long-sleeved shirts with garish ties. Well, that was just not going to work for a new generation of business men and investors, so an updated more visual vocabulary was created. And, like many other things, in life, we looked backwards to move forward, thus ripped from the fairy tales of our youth, I give you the Black Swan and the Unicorn.
Black Swans…oh, now I get it!
The idea of Black Swan events was popularized by writer Nassim Nicholas Taleb in his book, The Black Swan: The Impact Of The Highly Improbable, published in 2007. The idea itself has been around a lot longer, though. It originated from the Western belief that black swans did not exist, only white swans simply because that was all that had ever been seen, until Australia was discovered and the first black swan was found.
“The sighting of the first black swan might have been an interesting surprise for a few ornithologists, but that is not where the significance of the story lies. It illustrates a severe limitation to our learning from observations or experience and the fragility of our knowledge. One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans. All you need is one single black bird,” Taleb writes.
The Black Swan theory posits what you don’t know is far more important than what you do know. You can use all your knowledge to prepare for what you believe to be every eventuality, only to be proven wrong by one Black Swan event.
Tell me more about these Unicorns
As you can see, Black Swans have been around for awhile, but Unicorn businesses are a fairly new phenomenon first recognized in 2013 by venture capitalist Aileen Lee. Lee used this fantastical beast to represent the statistical rarity of any privately held start-up company valued at over $1 billion.
Given that most Unicorn companies are pre-IPO, you might want to set-up a Unicorn portfolio in your StockHop app so you’re ready to make an informed decision on buying when (and if) there’s an IPO. Here are some of the more well-known Unicorns to add to your portfolio:
Need more Black Swan info?
If you want more info on investing in and around Black Swan events, check out this article.
If you’re tired of reading about depressing Black Swan events, check out the entertaining (yet very disturbing) 2010 Black Swan film starring Natalie Portman and Mila Kunis.