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Preparing for a Black Swan

A black swan is an extremely rare event with severe consequences. The Covid-19 pandemic is the perfect example of a black swan event.

Naturally, when we have experienced a black swan event, the question arises as to whether we can do anything to prepare for such black swan events better. 

Our experiences with black swan events have shown that we always react and incorporate safety measures so that we can prevent such an event from occurring again. We did that with flying security after 9/11 and we did that with banking rules after the sub-prime mortgage crisis of a decade ago.

However, these just ensure we learn from the events we experience and prevent them from happening again. As the saying goes, "Fool me once and shame on you, fool me twice and shame on me". 

What about the black swan events that haven't happened yet?

While each of these events is extremely rare, there are so many of them that can happen that at least one of them happening every few years is a reasonably high probability. 

But does that mean we can prepare for them? And should we prepare for them?

Preparing for any one black swan event is a fool's errand. As there are such a variety of them that we can imagine, it makes little sense to prepare for all of them as the cost of doing that would be prohibitively high. 

Instead, the best way to prepare for a black swan is to learn to be more adaptable. As situations change, we need to build in the agility to be able to react quickly and incorporate the changes needed in ourselves to thrive in the new scenario.

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