Grey Swan
Categories: Financial Theory
A “black swan” event is one that comes out of nowhere and has significant ramifications. A flying saucer appearing above the White House would represent a black swan situation.
A grey swan is similar, but not as completely out of the blue. The event has some precedent, but still counts as very rare or unlikely. Also, this weird turn of circumstances has a serious impact.
You winning $100 million in the lottery might be considered a grey swan event. You bought the ticket, so you knew winning was possible. Still, chances were about half a billion to one.