Black Swan
 
Black Swan events were made famous by Nassim Taleb in his books Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets and The Black Swan: The Impact of the Highly Improbable and Anti-Fragile:  Things That Gain From Disorder.  Taleb defines a black swan as follows:

“…an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact…. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”

A Black Swan Event, by definition is catastrophic and random – it can happen anytime.  It is what Donald Rumsfeld described as the unknown unknowns.  Because the possibility of Black Swans exists in financials markets that are dominated by theories based on Gaussian (normal) distributions, risk is often underestimated, but however you model risk, being out of the market has inherently less risk than being 100% invested in the market at all times (Buy & Hold).  In simpler terms, if you are in cash, Black Swan events in the markets can’t hurt you.
 
Examples of Black Swans include Black Monday on October 19, 1987 when the Dow lost 20.5% that day.  In statistical terms, this was a 21-sigma event!  Also in 2008, Zimbabwe had the worst case of hyperinflation in the 21st century with a peak inflation rate of more than 79.6 billion percent. An inflation level of that amount is nearly impossible to predict based on historical data.