Unpredictable events or “Black Swans,” a term popularized by Nassim Taleb, are a facet of the twenty-first century economy and we should learn how to live with it rather than wish them away.

In a recent essay for the Huffington Post, Kenneth Posner, author of Stalking the Black Swan: Research and Decision Making in a World of Extreme Volatility, argues that “to anticipate Black Swans, or react quickly and accurately when they surprise us, requires a special way of thinking.”

Posner outlines ways in which both individuals and institutions can best respond to and deal with volatility Individuals, he suggests need to practice the craft of fundamental research, a technique developed by Warren Buffet’s mentors. Individuals should also react intuitively to new information and to learn to acknowledge when they’re wrong. In terms of reacting more intuitively, Posner suggests that “one of the reasons that the US mortgage industry was blindsided by the subprime crash was that its decision-makers became dependent on models built on historical data, and missed clues that conditions were changing.”

For institutions to become smarter about handling volatility, Posner advances four general ideas:

* Financial regulation should focus more on fast response to crisis, and less on trying to limit volatility through ever more complex rules and regulations.

* We should rotate officials in positions of power more frequently so as to minimize the risk that successful leaders become entrenched, making it hard for them to anticipate or react to change.

* Institutions should implement emergency protocols to help them react more quickly to Black Swan surprises.

* Institutions could allocate more resources to fundamental research.