We’re constantly being told that the future can be forecast, that the world is knowable, and that risk can be measured and managed. Yet finance guru and author of the surprise hit “Fooled by Randomness” Nicholas Taleb argues that history is dominated not by the predictable but by the highly improbable — disruptive, unforeseeable events that are called Black Swans. The Black Swan Theory is an event that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. It is based on an Old World premise that black swans did not exist, because one was never seen until settlers ventured to Australia. It illustrates a severe limitation to our learning from observations or experience and the fragility of our knowledge. What we call here a Black Swan is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. The theory was developed to explain: 1. The disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology. 2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities). 3. The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs. Classic events, based on Taleb's theory, include the rise of the internet and personal computer, the September 11 attacks and World War I. However, there are many other events such as floods, droughts, epidemics and so on that are either improbable or unpredictable or both. This "non-computability" of rare events is not compatible with scientific methods. The result, says Taleb, is that people develop a psychological bias and "collective blindness" to them. The very fact that such rare, but major events are by definition outliers, makes them dangerous. Other typical events include the 1929 Stock Market Crash, the Destruction of Pompeii following the eruption of Mt. Vesuvius in 79 A.D and the Atomic Bomb on Hiroshima in 1945. They include recent events such as the Japanese Tsunami on March 11, 2011. They can also include unpredictable slower moving events such as the Collapse of the Roman Empire. Black Swans are game-changers. But the point is, we all want to know the future, but we can't. We can model and predict some things (to an extent), but not others, not the black swan events. And this creates psychological and practical problems.