...The theory of black swan events was developed by Nassim Taleb to explain the unpredictability of very rare high impact events that are normally beyond normal human expectations. The theory of black swan events has become a metaphor for unexpected events that cause shock and awe to victims and/or observers, and that these victims/observers who after experiencing the shock and awe of the unexpected event, tend to rationalize or find explanations that fit the ocurrence of the mishap among normal events. In its true sense as its developer- Nassim Taleb- intends it to mean, the "black swan theory" refers only to unexpected events of very large magnitude and consequence and whose occurrence in nature is so rare as to be considered not just outliers but extreme outliers. This means that Black swan events are so extreme that their probability is not computable using scientific methods. Black Swan events are also so called because they are events that fall within our blind spots, are oblivious not only to the mind but also to thought due to psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs. Black swan events were introduced by Nassim Taleb in his 2004 book, Fooled By Randomness, which concerned financial events. In his 2007 book (revised and completed in 2010), The Black Swan, Taleb extended the metaphor to events outside of financial markets. Taleb regards...
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...The focus of this critique is on the film Black Swan, directed by Darren Aronofsky and starring Natalie Portman, Mila Kunis, and Vincent Cassel. A movie about a young woman’s consuming desire for perfection as a ballerina in the role of a lifetime. Throughout this film the mise-en-scene was raw and grainy with diverse camera angles that gave an out of control feel that added to the instability within the scenes. As the film progresses the viewer becomes increasingly unsure of the reality that the Nina character is experiencing. The tight quarters of the sets, apart from the practice room, emphasized and helped to showcase the pressure at the studio and the controlling atmosphere at home. The editing in this film was linear and showed the gradual and increasing mental instability of Nina. At times it was difficult to know where in her mental decline she was at and what she was experiencing versus what was only in her mind. Had the film been edited in a nonlinear fashion it would have added a tremendous amount of confusion for the viewer and destroyed the continuity of her experiences and gradual mental deterioration. Sound is effectively used in scenes depicting the reality of particular events. The harsh sounds of the cutting and clipping of Nina’s fingernails sounded like the snapping of small bones. The sound of grinding the bottoms of the ballet slippers in the resin box, the scraping, scratching sound of the knife slicing the bottoms of the shoes were...
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...This essay is based on the 2007 book The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb (1960 - ). It is hardly an obscure tome, having been on the New York Times bestseller list for several weeks. Before I get to the essence of this essay I believe explaining what the term “Black Swan” means and saying a few words about the author would be in order. It was once thought in the Old World that only white swans existed. Then from Australia came the realization that there were black swans. And no, they were not white swans made black by bootblack or any other artificial coloring medium. After millennia of observations in the West of millions of white swans, the sighting of one black swan was enough to invalidate this long and firmly held belief. In a broader sense then A Black Swan is a sudden, monumental, and completely unexpected event. WWI, WWII, and 9/11 were Black Swans. If one were to win a multi-million dollars lottery that would be a personal Black Swan (Black Swans are not all negative, although given the troubles experienced by some of these huge lottery winners, this might also be negative). But a Black Swan is more than this – it goes to the heart of and challenges the putative acceptance of Gaussian probabilities. Least you think Gaussian or bell shaped probability functions are theoretical only and not important in real life, then consider that not only mathematics, but engineering, medicine, social sciences, economomics, the insurance...
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...What is a Black Swan? My first thought when it was mentioned in class during the semester was the film Black Swan that hit theatres in 2011. I, of course, was completely wrong. A Black Swan in the business world, or as Taleb explains, anywhere in the world is an event that comes as surprise effects things drastically and is often looked upon as something that should have been seen coming in hindsight. The Black Swan theory was popularized by Nassim Nicholas Taleb, and is defined as an event that breaks off from what usually happened in a certain scenario and that is nearly impossible to predict. The theory is most commonly used in the business sense to describe markets, however, Taleb uses it in a sense to describe every sort of event that can happen in the world. The Black Swan is typically characterized by three criteria. These are rarity, extreme impact, and retrospective predictability. These Black Swan events allow for Taleb to discredit many things that are used in the financial world today, such as Gaussian’s bell curve. The theory of the Black Swan has been proved very important topic and is used and talked about by many people in not only the business world but in everything. Taleb gives an example of what the Black Swan name comes from by describing the actual myth of the black swan. For as long as people had known there was no other type of swan besides a white one. Until Australia was discovered no one had ever seen a black swan and it used as a common...
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...A Black Swan is a sudden, and an unexpected event with a major impact and consequences. There are negative black swans such as wars, natural disasters, and pandemic, and there are positive black swans such as the internet, Harry Potter books, and scientific discoveries. All those phenomena have deeply impacted the world, and transformed lives. Nassin Nicholas Taleb was forced out of Lebanon because of a civil war that was thought unimaginable due to the secular characteristic of its society The author first experience of the Black Swan was the civil war in Lebanon in which different religious factions were fighting one another. At the beginning everyone thought that it will be short, since all the communities were living in harmony. As every Black Swan the impact is tremendous like it was the case in this civil war were family were force to moved out which also created mistrust between communities. the author has also focused a big part of the book describing two worlds. The first world is the Mediocristan in which everything is predictable or for the most part. In this world people earnings are correlated to their work, and in this segment events can be explained using the Gaussian distribution curve. The second world is the Extremistan, in which events are highly unpredictable, and their impact are sudden and can be catastrophic. One of this even would be 9/11 or the black Monday and Tuesday, when the U.S stock crashed causing a 22% decline of the market. For Taleb, Extremistan...
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...THE B L A C K SWAN The HIGHLY I mpact IM of the PROBABLE Nassim Nicholas Taleb U.S.A. $26.95 Canada $34.95 is a highly improbable event with three principal characteristics: It is unpre dictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9 / 1 1 . For Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives. A BLACK SWAN Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don't know. We are, therefore, unable to truly estimate oppor tunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the "impossible." For years, Taleb has studied how we fool our selves into thinking we know more than we actually do. We restrict our thinking to the irrelevant and inconsequential, while large events continue to surprise us and shape our world. Now, in this reve latory book, Taleb explains everything we know about what we don't know. He offers...
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...Business and management terms dictionary 21-Gun Salute - Traditional honour given to royalty and heads of state, derived from the old signal of peaceful intent, when multiple firing practically removed capability for immediate threat due to re-loading time. 24-Carat/Karat - The purest form of gold (karat is US-English spelling, too soft for jewellery, hence gold jewellery is made of 22-carat, 18-carat, or 9-carat gold, etc., in which other metals such as copper are mixed. Carat is a measure of purity in which 24 parts equate (virtually) to 100% gold. 18-carat is therefore 75% gold. Less than 10-carat gold is generally not sold as gold. The carat measure of diamonds is different, for which carat is a measure of weight (1 carat = 200mg). 24-hour Society - Refers to a way of life available to many in the modern world in which people can work socialize, shop, bank, etc., 24 hours a day. The phenomenon has caused significant new thinking in business, management, marketing, etc., and continues to do so. ...
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...The Art of Thinking Clearly Critical Review Colby Wallace Northern Alberta Institute of Technology Abstract This paper is a critical review on Rolf Dobelli’s novel, The Art of Thinking Clearly. It is composed of a literature review and a critical analysis. The literature review section will be a composition of research gathered to: have a better understanding of the books sources, test for sloppy reasoning and get a good understanding of how the book is perceived through reviews. All research will be done through the novel itself, N.A.I.Ts library database and reputable online sources. The information found in the literature review will then be evidence used to determine the answers to the seven key critical questions: 1. What is the source of the article? 2. What kind of publication is it for what audience? 3. What is the main point (thesis) of the article? 4. Are there any new insights about the topic that you did not have before reading it? 5. Do you agree or disagree with its position and evaluation of the topic? 6. How reliable is this particular source as a guide to the truth of the topic? 7. Also, which, if any, of the sloppy reasoning errors can be found in the article? The paper will close with a conclusion that reiterates the papers key points. The Art of Thinking Clearly Critical Review Dobelli, R. (2013). The Art of Thinking Clearly. London: Sceptre. The Art of Thinking Clearly (TAOTC) takes a philosophical look at...
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...the financial crisis and how it can be improved. Black Swans in this study are events that were the Achilles heel of financial models. There are usually 25 standard deviations evens that happen several days in a row. The purpose of this study is to discuss the implications of black swan events in asset pricing and risk management. Black Swan events disappeared for S&P Index returns are measured relative to standard deviation of the conditional S&P distribution. In this study a one day lagged VIX is used to provide an understandable measure of conditional S&P standard deviation (Marsh & Pfeiderer, 2012). The Research Question How did economists and others get it so wrong and what can be done to change it? Have risk modelers created an industry whose intense technical debates with each other lead gullible outsiders to believe that this is a profession with genuine expertise? Hypothesis "Extant models that properly encompass predictable shifts in investment risk ameliorate much of the alleged "black swan" problem and securities markets do in fact seem to be attuned to the risk of rare economic disasters and "price in" their risk"(Marsh & Pfeiderer, 2012, p 2). Main Findings The first finding is in the presence of significant model specification risk and estimation risk, decisions made by averse decision makers are more conservative rather than aggressive. Investors want to protect themselves against the black swan risk and may purchase insurance to help with the...
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...Risks exist in every aspect of business, but project management efforts are particularly sensitive to distinguishing and minimizing risk potential in order to complete the project in time. When a project management team determines project goals, it should discover all the risks that potentially threaten the achievement of these objectives. A comprehensive risk analysis can assist in finding out barriers to project’s success and develop contingency plans. Project management teams usually develop risk management plans that serve to identify risks, strategize ways to minimize or avoid those risks and develop contingency plans in case risks occur and delay a project’s completion. Projects often get started in the right way but then get off course. For example, project managers will take their time and resources to develop a clear scope and detailed plan with their team. Then something unexpected happens, such as natural disaster or major equipment failures. The project managers and team shift into their reactive mode and try to manage this risk based on their experiences and best judgment. But they do not know for sure if it works and hope for best because they don’t have time to analyze whole procedure and they have no opportunity to test it out. This is not risk management instead it is management in disaster. The problem is not a lack of understanding the “why, what, who, or when” of risk management. Lack of effectiveness comes most often from not knowing “how to”. To be fully...
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...Flaws with Black Scholes & Exotic Greeks Treasury Perspectives Flaws with Black Scholes & Exotic Greeks 1 Flaws with Black Scholes & Exotic Greeks 2 Flaws with Black Scholes & Exotic Greeks Dear Readers:It’s been a difficult and volatile year for companies across the Globe. We have seen numerous risk management policies failures. To name a few... UBS, JPM Morgan, Libor manipulations by European, US and Japanese banks and prominent accounting scandals like Lehman… As rightly said by Albert Einstein “We can't solve problems by using the same kind of thinking we used when we created them.” and when you can't solve the problem, then manage it and don’t be dependent upon science as Science is always wrong, it never solves a problem without creating ten more. The same is the case with Foreign Exchange Risk Management Policies (FXRM) which if can’t be managed properly then would lead to either systematic shocks or negative implications at the bottom line of the corporate, banks, FI and trading houses P&L A/cs. That is something risk management struggles with, say the experts. In Richard Meyers’ estimation, risk managers or traders do not socialize enough. “It’s all about visibility,” he said. Meyers, chairman and CEO of Richard Meyers & Associates, a talent acquisition and management firm in New Jersey, relates the story of a firm that decided to adopt an Enterprise Risk Management (ERM) strategy. Instead of appointing its risk manager to head...
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...Movie Critique The focus of this critique is on the film Black Swan, directed by Darren Aronofsky and starring Natalie Portman, Mila Kunis, and Vincent Cassel. A movie about a young woman’s consuming desire for perfection as a ballerina in the role of a lifetime. Throughout this film the mise-en-scene was raw and grainy with diverse camera angles that gave an out of control feel that added to the instability within the scenes. As the film progresses the viewer becomes increasingly unsure of the reality that the Nina character is experiencing. The tight quarters of the sets, apart from the practice room, emphasized and helped to showcase the pressure at the studio and the controlling atmosphere at home. The editing in this film was linear and showed the gradual and increasing mental instability of Nina. At times it was difficult to know where in her mental decline she was at and what she was experiencing versus what was only in her mind. Had the film been edited in a nonlinear fashion it would have added a tremendous amount of confusion for the viewer and destroyed the continuity of her experiences and gradual mental deterioration. Sound is effectively used in scenes depicting the reality of particular events. The harsh sounds of the cutting and clipping of Nina’s fingernails sounded like the snapping of small bones. The sound of grinding the bottoms of the ballet slippers in the resin box, the scraping, scratching sound of the knife slicing the bottoms of the...
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...British Board of Film Classification (BBFC) Alana Finn 14R Media Studies Miss Garry The British Board of Film Classification, known as the BBFC, was set up in the film industry in 1984. It is an independent regulator of non-governmental body that classify films before they go to the cinema. They are currently based in Soho Square, London, Regulating the UK only and have a requirement to classify videos, and DVDs as well as some video games under the Video Recordings Act (1984), acknowledging and reflecting the UK's diverse cultural society. Originally set up in 1912 in order to put together rules and judgement on censorship, the British Board of Film Classification was known as the British Board of Film Censors until 1985. The BBFC then changed their name for the reason that they wanted to be known for the much larger role of actual classification that went into the boards work, rather than censorship, also applying the test of 'suitability for viewing in the home'. In the case of films shown in cinemas, local authorities have the final legal authorisation over who can view a particular film. The majority of the time, legal authorities accepts the Board's recommendation for a certificate for a film. Although there have been some exceptions, particularly in the 1970's when the board allowed films such as The Last Tango In Paris and The Exorcist to be released with an X certificate (18+), but many local authorities chose to ban the films regardless. The BBFC is a non-profit...
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...Introduction In my essay I am going to be discussing ‘Tragic Ballets ‘and ‘Heroines’. As a child I spent a brief period studying ballet and on a visit to Prague, in February 2013, I enjoyed watching the Russian Ballet perform 'Giselle' at the Prague State Opera House. I have often wondered why so many ballets and the female heroines in them end in tragedy. My essay will discuss the issues that female heroines face and the events that eventually bring them to their fate. I will also discuss the origins and definitions of ‘heroine’ and ‘tragedy’. In order to examine my chosen themes I started my investigation by watching, analysing and comparing the films ‘Black Swan’, ‘The Red Shoes’ and the ballet ‘Giselle’. I read the feminist writings of Marina Warner on the portrayal of women, the Catholic Church and also her book on ‘Joan of Arc. In my essay I will be discussing the themes of love, conquest, devotion, deception, spirituality and how they play a role in altering the lives of the female protagonists in various different situations and offer my own opinions on how the tragedies are formed. I will begin my comparison of the female heroines that I will be discussing, with Giselle. Figure 1'Giselle and Count Albrecht' The Russian Ballet Giselle is a poor peasant’s daughter who falls in love with Count Albrecht. Count Albrecht’s character plays the main part in the protagonist Giselle’s downfall during the ballet, as he breaks her heart when she learns that he is betrothed...
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...Point of view shot or POV, where the viewer or audience is looking through the eyes of a certain character. POV shots are common in horror and thriller films, which Aronofsky classifies Requiem for a Dream as a “urban horror film” and Black Swan as a physiological thriller. By changing the traditional camera shot to POV shot, it allows a change in the viewing experience of the film becoming more personal for the viewer. This personal experience is heightened by the view of the scenes through the subject’s eyes. The audience is seeing the events of the story as the main subject is seeing and experiencing the action of the scene. In Black Swan, during a rehearsal scene, we see through Nina’s eyes. She is practicing a spinning ballet move, and...
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