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He also argued that conversely, a system that is propped up and insulated from risk ultimately becomes more vulnerable to catastrophic loss in the face of rare, unpredictable events. The term was popularized by Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street trader. Taleb wrote about the idea of a black swan event in a 2007 book prior to the events of the 2008 financial crisis. Some believe that diversification may offer some protection when a black swan event does occur. If we consider the content of the picture very briefly, then it tells the story of a young ballerina Nina (Natalie Portman). Once she got the lead role in the production of Swan Lake, a recognized stage masterpiece.
- While the film dramatizes the unveiling of Nina’s illness, it presents some reasonably accurate elements of first-break psychosis.
- Being killed to provide a Thanksgiving dinner would be a black swan event for that turkey, but such is not the case for the butcher who does the killing.
- It rarely happens, nevertheless, it has consequences.
All evidence that contradicts those biases tends to be ignored. This can lead to an inaccurate assessment of risks involved in what humans do, leaving the door open for a potential black swan event. Black swan logic thus makes what is not known more relevant than what is known. Consider the case of a turkey that has been fed daily since birth. Being killed to provide a Thanksgiving dinner would be a black swan event for that turkey, but such is not the case for the butcher who does the killing. The theory of black swan logic calls on people to gather as much information about the world as possible, to train themselves to review the information rigorously, and to be aware of their biases.
Predicting the Black Swan events: it’s in the meaning
Nina has a fight with her mother and shuts herself in her room. According to Nina, she’s with Lily, and the two make out. This represents how Nina has projected her alternate persona on to Lily (who’s not in the room).
IT took in a total of $415,822 on its opening day, averaging $23,101 per theater. “Black Swan” had its world premiere as the opening film at the 67th Venice Film Festival on September 1, 2010. It received a standing ovation whose length Variety said made it “one of the strongest Venice openers in recent memory”. On the decade’s wait before production, she said, “The fact that I had spent so much time with the idea … allowed it to marinate a little before we shot.” In addition to the soloist performances, members of the Pennsylvania Ballet were cast as the corps de ballet, backdrop for the main actors’ performances. Darren Aronofsky first became interested in ballet when his sister studied dance at the High School of Performing Arts in New York City.
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There are ways to account for this problem including an understanding of The Lucretius Problem, factoring in a Margin of Saftey, and having skin in the game. Secondly and more likely, Nina takes the pill when Lily offers it to her. However, her accelerating psychosis causes her to believe she’s been spiked. Because it leaves her free to “live a little” and enjoy her fantasies … without the guilt of being a bad girl (i.e., the black swan). Similarly, while the ballet ends with Odette’s death, the movie ends with Nina literally and figuratively killing off the white swan / Odette. Nina (Natalie Portman) wants to be perfect almost as much as she craves the dual role of Odette / Odile in her ballet company’s production of Swan Lake.
However, by definition, a black swan event is hard to predict. As black swan events are rare and highly improbable, predicting them can be quite difficult. By now, you should be aware of how a black swan event unfolds, festers, and concludes. Now let’s look at some real examples that can help us better decipher the meaning of the black swan theory (we will cover the impact of these examples in more detail later in the article). Once the black swan event concludes, it is a common right to see people drawing parallels, rationalizing the event, and creating explanations. This form of hindsight bias furthers a sense of false belief that black swans can be identified easily.
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Now it could be that Thomas is leveraging Nina’s insecurities to become the Black Swan. That making Lily her alternative Nina will fight harder. Thomas had seen how Nina first came to meet him dolled up when it looked like she might not get the role. Nina begs Thomas to make someone else her alternate as she feels Lily is trying to steal her role.
Nina is highly distracted and as a result, gets dropped by her partner. Back in the changing room, Nina’s insecurities cause her to imagine Lily sitting and preparing for the Black Swan. Imaginary-Lily suggests that she should do the Black Swan as Nina will not be able to. It’s basically a battle between the personalities of the Black-Swan and White-Swan in Nina’s head.
He even asks the guy she’s dancing with if he’d sleep with Nina, who scoffs. Thomas sends everyone off and continues the rehearsal alone with Nina. Thomas tells her that this was him seducing her, but it needs to be the other way around. Lily explain how Thomas is a jerk, but Nina feels he’s brilliant. It also appears that Nina is infatuated with Thomas. Next day, Thomas is making Nina repeat her act without any corrections.
Thomas is overjoyed with Nina’s performance, and he says “My little princess, I always knew you had it in you.” Just like Beth was, Nina now is his little princess. Which also means that one day she will be retired because of a younger ballerina. Thomas eventually notices the blood and calls for help.
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The plot revolves around a production of Tchaikovsky’s Swan Lake by the New York City Ballet company. Nina is overwhelmed by a feeling of immense pressure when she finds herself competing for the role, causing her to lose her tenuous grip on reality and descend into madness. Apart from its exploration of the murky politics behind ballet productions and the physical challenges faced by ballerinas, Black Swan also serves as a strong commentary on mental illness. While films dealing with troubled artists might fetishize or even betray mental illness sufferers, Nina’s issues are shown with a level of sensitivity and ultimately, concern. From the start, Nina’s overprotective mother seems to have contributed to her body image issues and performance anxiety. The earliest known reference to the term black swan occurs in the Roman poet Juvenal’s poem Satire VI, in which he describes potential qualities of a woman worthy of marriage.
The stage represents her public life, the moves she makes for everyone to see, while her dressing room takes us into the troubled private interiors of her mind. She thinks she has killed Lily and dragged her body out of sight in the dressing room. In reality, Nina has stabbed herself in the abdomen with a shard of broken glass. Some of their relationship, including their hookup on the bed where Nina was shown masturbating earlier, appears to have been wholly imagined. It was more about Nina confronting her own dark side, what one of her ballet coaches likens to an “evil force” pulling her that she can’t escape. As Thomas tells her, “The only person standing in your way is you.”
While viewers are uncertain of her mother’s mental illness status, the genetic factor may be present. This magnitude of stress is a precipitating factor of Nina’s symptoms. Nina is in her early twenties and is socially withdrawn, two common elements in patients experiencing their black swan explained first psychotic episode. One of the biggest mistakes that people make with black swans comes with a big impact. Extrapolating, using statistics based on observations of past events is not helpful for predicting black swans, and might even make us more vulnerable to them.
- Thomas toasts to Beth calling her “My Sweet Princess”.
- Banks and large funds capitalized on the market, creating mortgage-backed securities which, in turn, made banks make riskier loans.
- Featuring a cast including Barbara Hershey, Vincent Cassel, Winona Ryder, and Mila Kunis, Black Swan is a twisted mirror of Tchaikovsky’s Swan Lake ballet, all the way down to its disturbing finale.
Lily is ready to take on her role, but Nina threatens Thomas with another scandal if he doesn’t let her dance. “The only person standing in your way is you. Lose yourself,” Thomas says. But Nina’s nerves are getting the better of her and her hallucinations continue. She loses her concentration on stage, leading to her partner dropping her during the performance. In Darren Aronofsky’s “Black Swan,” mirrors, windows, and other reflective surfaces abound.
The dotcom bubble of 2001 is another black swan event that has similarities to the 2008 financial crisis. America was enjoying rapid economic growth and increases in private wealth before the economy catastrophically collapsed. Since the Internet was at its infancy in terms of commercial use, various investment funds were investing in technology companies with inflated valuations and no market traction. When these companies folded, the funds were hit hard, and the downside risk was passed on to the investors. The digital frontier was new so it was nearly impossible to predict the collapse.
In May 2022, Terra — one of the more promising crypto projects — went belly up in a $1 trillion implosion. The dual-token economics of the Terra (LUNA) ecosystem, involving LUNA and UST (a stablecoin), was hit hard when UST depegged from its $1 peg. As it started dipping, an effect multiplied by the panic all around, even LUNA started suffering. Eventually, the entire ecosystem folded like a losing hand, questioning everything we knew or believed about algorithmic stablecoins. While there have been several other Black Swan events, these two have been the most obvious reminders of how unforeseen events can wreak havoc across global economics.
You look at her bedroom and it looks like a little girl’s room, not that of a 28-year old women. We know this stunted development is partly due to Aronofsky’s critique of ballet as a whole. But it’s also there because the story is about Nina’s loss of innocence and her struggle to tap into that darker side of herself. By defining her as childlike, it highlights her innocence and why she struggles with the role.
The black swan paradox says that investors cannot rule out theories just because they haven’t seen them before. This is why investors need to factor in all possible outcomes. Consider this strategy as working like a detective who believes in the trial and error method. With Bayesian analysis, you consider that a black swan event — like a large-scale exchange implosion, something similar to the FTX meltdown — might occur. And you keep updating the findings and analysis based on new evidence.
Thomas assures her that she had her breakthrough and the opening day she will shine. He also says “Just give a great performance and you won’t have to worry about Lily or anybody else.” – this is why I suspect Thomas might be pushing Nina to go an outstanding job. She’s good enough to play the Swan Queen, else Thomas wouldn’t pick her as the alternate.
