Black Swans and meteorites

[txitxo]

A meteorite exploding over Chelyabinsk, in Russia. A good reminder of unexpected risks...

 

[Palantir]

Hate to be a know-it-all, but I think meteorites are better described as "tail risks" rather than "black swans", as they are rare events, rather than simply unexpected.

[txitxo]

Hate to be a know-it-all, but I think meteorites are better described as "tail risks" rather than "black swans", as they are rare events, rather than simply unexpected.

 

Well, the difference between tail risks and black swans is mostly one of perspective. Yes, DA14 is going to pass below the geosynchronous orbit tonight and asteroids (like cockroaches) are hardly ever alone. Russia is the largest country on Earth, and therefore the most likely to see an event like this, so perhaps you could expect something like this, even it is a very low probability event. But imagine that this thing had been slightly larger, or moving slightly faster, and you had just bought shares on Magnitogorsk Iron and Steel Works, after convincing yourself of the management quality and the company prospects, and then see your investment obliterated by the violent vaporization of a house-size chunk of carbonaceous chondrite. That would certainly quality as a Black Swan. 

[ragnarisapirate]

Hate to be a know-it-all, but I think meteorites are better described as "tail risks" rather than "black swans", as they are rare events, rather than simply unexpected.

 

Well, the difference between tail risks and black swans is mostly one of perspective. Yes, DA14 is going to pass below the geosynchronous orbit tonight and asteroids (like cockroaches) are hardly ever alone. Russia is the largest country on Earth, and therefore the most likely to see an event like this, so perhaps you could expect something like this, even it is a very low probability event. But imagine that this thing had been slightly larger, or moving slightly faster, and you had just bought shares on Magnitogorsk Iron and Steel Works, after convincing yourself of the management quality and the company prospects, and then see your investment obliterated by the violent vaporization of a house-size chunk of carbonaceous chondrite. That would certainly quality as a Black Swan.

 

I would like to know how many russians (last week) thought that it was of any risk.

 

I certainly don't consciously price in flying chunks of space rock into my investments...

[Kraven]

Hate to be a know-it-all, but I think meteorites are better described as "tail risks" rather than "black swans", as they are rare events, rather than simply unexpected.

 

Well, the difference between tail risks and black swans is mostly one of perspective. Yes, DA14 is going to pass below the geosynchronous orbit tonight and asteroids (like cockroaches) are hardly ever alone. Russia is the largest country on Earth, and therefore the most likely to see an event like this, so perhaps you could expect something like this, even it is a very low probability event. But imagine that this thing had been slightly larger, or moving slightly faster, and you had just bought shares on Magnitogorsk Iron and Steel Works, after convincing yourself of the management quality and the company prospects, and then see your investment obliterated by the violent vaporization of a house-size chunk of carbonaceous chondrite. That would certainly quality as a Black Swan.

 

I would like to know how many russians (last week) thought that it was of any risk.

 

I certainly don't consciously price in flying chunks of space rock into my investments...

 

I think this is exactly right and why I find it extremely difficult to understand holding large percentages of a portfolio in a single position.  One never knows what can happen.  It may be extremely remote, but things change all the time.

[rkbabang]

Excellent footage of it from a distance in this one:  http://www.youtube.com/watch?feature=player_embedded&v=QIMKQihoYRI

[txitxo]

I think this is exactly right and why I find it extremely difficult to understand holding large percentages of a portfolio in a single position.  One never knows what can happen.  It may be extremely remote, but things change all the time.

 

Exactly. An update: the meteorite seems to be made of iron (that's why it managed to penetrate so deep into the atmosphere) and apparently it's not related to DA14, which makes this event a really freak coincidence...It seems that the Russians tried to down it...good thing the Cold war is over...

[Guest hellsten]

http://www.logtv.com/films/chelyabinsk/

 

The people of the area have suffered no less than three nuclear disasters

[Olmsted]

I was privileged enough to witness two events like this (minus the injuries!): one when I was younger and a meteor streaked over a high school football game and subsequently damaged a parked car:

 

http://uregina.ca/~astro/mb_5.html

 

The car: http://apod.nasa.gov/apod/ap061119.html

 

Another in 2009 while walking the dog at night, saw a bright streak and flash.  A loud boom subsequently shook the ground:

 

http://transientsky.wordpress.com/2009/03/31/2-bright-and-loud-east-coast-fireballs/

 

Wild stuff!