Black Swans

Titanic won the Academy Award for Best Picture in 1997. The movie portrays the sinking of the maiden voyage of the RMS (Royal Mail Service) Titanic in the North Atlantic in 1912. The RMS Titanic was the biggest ship afloat at the time and thought to be “unsinkable.” Then, more than 1500 passengers and crewmembers died when the unsinkable sunk. The movie received incredible hype before the opening and ran away with 11 academy award nominations due mainly to the groundbreaking special effects. But as the movie has aged and the cutting-edge special effects look more mundane each year, folks are less enamored with the stale, one-dimensional characters. Caledon “Cal” Nathan Hockley plays the snobby, rude, spoiled, selfish cliché of the rich kid. Cal declares before boarding the ship, “It is unsinkable. God himself could not sink this ship!” Many statisticians consider the sinking of the Titanic to be a “black swan.” The term black swan means a surprise event that has a major impact and is often rationalized after the fact. New York University professor Nassim Taleb popularized black swan theory through a series of papers and books. He argues that black swans have three attributes: unpredictability, consequences, and retrospective explainability, like the Titanic.