A True Black Swan

A True Black Swan: If you are any kind of sports fan then you know at least a little about the Manti Te'o story. If you are unfamiliar, Te'o is the star linebacker at Notre Dame who vaulted into the national spotlight in October when both his grandmother and his girlfriend died (the girlfriend died of leukemia). Te'o played inspired football all season and was a Heisman finalist.

Earlier this week it emerged that the girlfriend was a hoax. Te'o claims he was the victim of the hoax because she was an "internet girlfriend" whom he'd never actually met. The other side of the story is that Te'o had a hand in perpetuating the hoax to help his football career.

Regardless of whether Te'o was involved or not this was big, big news three months ago and the girlfriend turning out to be hoax was in no way reasonably predictable by anyone.

Contrast that with the Lance Armstrong story. Cycling has been riddled with athletes using PEDs for years and also for years people in a position to have at least some idea have been saying Armstrong cheated. Anyone could have been surprised this week but this has been reasonably predicted by many people.

The term Black Swan gets thrown around a lot and often done so incorrectly. There are investment strategies and investment products sold on the idea of offering Black Swan protection. There are also many articles that offer lists of Black Swans to watch out for. These are not Black Swans they are tangible threats that will either come to matter or they won't.

The idea of banks being over leveraged (and having other problems) and the real estate market imploding was less of a black swan than the bond market ceasing up and not functioning for a brief time in October 2008 as a result of the banks and real estate problems.

Back to Armstrong, I can't reconcile my thoughts on this whole thing. He cheated and lied about it very aggressively; point conceded. I still can't come to a conclusion.

DIGITAL JUICE