For those of you aware of recent events taking place today, i decided to shed some light and then let your minds wander a bit and fill in the gaps with what they will as to what all this means, or why i am telling you all this. There are two books written by a guy named Nassim Nicholas Taleb: "Fooled by Randomness" and "The Black Swan" These books talk about the hidden role of chance in the markets and in life. "This book is the synthesis of, on one hand, the no-nonsense mathmatical trader (self-styled "practitionar of uncertainty") who spent his life trying to resist being fooled by randomness and trick the emotions associated with uncertainty and, on the other, the aeseticallg obsessed, literature-loving human being being willing to be fooled by any form of nonsense that is polished, refined, original, and tasteful. I am not capable of avoiding being the fool of randombess; what i can do us confine it to where it brings aesthetic gratification." In these books it becomes clear that the problem of induction is more relevant in the world of finance then any other The problem is referred to as The black swan problem. No amount of observations of white swans can allow the conclusion that all swans are white, but the observation of a single black swan is sufficient enough to refute that conclusion. Therefore; The black swan theory or theory of black swan events is a metaphor that describes a massive event that comes as a surprise, and has a catestrophic effect. That my friends is what a Black Swan is...
TL;DR The black swan theory is that no amount of proof in science can prove something is absolutely true, but one different observation can prove anything absolutely wrong. Or something like that.