A black swan event refers to an extremely rare and impactful event. It is based on an observation about the limitations of inductive reasoning by philosopher David Hume: “No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion” (154-55). Hume was pushing back against the prevailing empiricism of his time by suggesting that nothing could be proven by inference. Taleb notes that a black swan was indeed discovered in Australia, illustrating that though it is improbable, the rare event is always possible.

A concept of probability in mathematics, ergodicity “means, roughly, that (under certain conditions) very long sample paths would end up resembling each other” (92). Taleb clarifies “that time will eliminate the annoying effects of randomness” (192). In addition, Taleb notes, over the long term it becomes mathematically probable that a rare event will take place.

Deductive and inductive reasoning are two different ways to reach logical inferences. In deductive reasoning, if the premises are true, the conclusion must be true. The conclusion is dependent on verifying the premises. By contrast, inductive reasoning extrapolates a general conclusion based on available evidence.