"The Zurich Axioms" by Max Gunther part-2

#1
Minor Axiom X.
Never hesitate to abandon a venture if something more attractive comes into view.
Strategy
The Sixth Axiom urges you to preserve your mobility. It warns against the many things that can get you rooted, to the detriment of your speculative career: sentiments like loyalty, hangups like the wish to wait around for a payoff. It says you must stay footloose, ready to jump away from trouble or seize opportunities quickly.
This doesnt mean you have to bounce from one speculation to another like a Ping-Pong ball. All your moves should be made only after careful assessment of the odds for and against, and no move should be made for trivial reasons. But when a venture is clearly souring, or when something clearly more promising comes into view, then you must sever those roots and go.
Be careful. Dont let those roots grow too thick to cut.
The Seventh Major Axiom: on Intuition
A hunch can be trusted if it can be explained.
Minor Axiom XI.
Never confuse a hunch with a hope.
Strategy
The Seventh Axiom suggests that it is a mistake either to laugh at hunches categorically or to trust them indiscriminately. Though intuition is not infallible, it can be a useful speculative tool if handled with care and skepticism. There is nothing magical or otherworldly about intuition. It is simply a manifestation of a perfectly ordinary mental experience: that of knowing something without knowing how one knows it.
If you are ht by a strong hunch telling you to make a certain move with your money, the Axiom urges you to put it to a test. Trust it only if you can explain it - that is, only if you can identify within your mind a stored body of information out of which that hunch might reasonably be supposed to have arisen. If you have no such library of data, disregard the hunch.
The associated Minor Axiom xi warns, finally, that a hunch can easily be confused with a hope. Be especially wary of any intuitive flash that seems to promise some outcome you want badly.
The Eight Major Axiom: on Religion and The Occult
It is unlikely that Gods plan for the universe includes making you rich.
Minor Axiom XII.
If astrology worked, all astrologers would be rich.
Minor Axiom XIII.
A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.
Strategy
Now lets review the Eighth Axiom. What does it have to say about money and religion and the occult?
It says, essentially, that money and the supernatural are an explosive mixture that can blow up in your face. Keep the two worlds apart. There is no evidence that God has the slightest interest in your bank account; nor is there any evidence that any occult belief or practice has ever been able to produce consistently good financial results for its devotees. The most anybody has ever been able to show is an occasional, isolated bulls eye hit, which gets a lot of attention but proves nothing except that lucky flukes happen.
To expect help from God or from occult or psychic powers is not just useless but also dangerous. It can lull you into an unworried state which, as weve seen, is not a good state for a speculator to be in. In handling your money, assume you are entirely on your own. Lean on nothing but your own good wits.
The Ninth Major Axiom: on Optimism and Pessimism
Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
Strategy
The Ninth Axiom warns that optimism can be a speculators enemy. It feels good and is dangerous for that very reason. It produces a general clouding of judgment. It can lead you into ventures with no exits. And even when there is an exit, optimism can persuade you not to use it.
The Axiom says you should never make a move if you are merely optimistic. Before committing your money to a venture , ask how you will save yourself if things go wrong. Once you have that clearly worked out, youve got something better than optimism. Youve got confidence.
The Tenth Major Axiom: on Consensus
Disregard the majority opinion. It is probably wrong.
Minor Axiom XIV.
Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.
Strategy
The Tenth Axiom teaches that a majority, though not always and automatically wrong, is more likely to be wrong than right. Guard against betting unthinkingly either with the majority or against, but particularly the former. Figure everything out for yourself before putting your money at risk.
The greatest pressures on you, and the most frequently felt, will be those that push you into betting with the majority. Such march-with-the-crowd speculations, the Axiom warns, can be costly, for it is in their nature that they tend to make you buy when prices are high and sell when they are low. The strongest line of resistance against these pressures is a keen awareness of their existence and insidious power.
The Eleventh Major Axiom: on Stubbornness
If it doesnt pay off the first time, forget it.
Minor Axiom XV.
Never try to save a bad investment by averaging down.
Strategy
Now a quick review of the Eleventh Axiom. What does it counsel you to do with your money?
It says that perseverance is a good idea for spiders and kings but not always for speculators. Certainly you can persevere in your general effort to learn, improve, and grow rich. But dont fall into the trap of persevering in an attempt to squeeze a gain out of any single speculative entity.
Dont chase an investment in a spirit of stubbornness. Reject any thought that a give investment owes you something. And dont by the alluring but fallacious idea that you can improve a bad situation by averaging down.
Value the freedom to choose investments on their merits alone. Dont give that freedom away by getting obsessed with one soured venture.
The Twelfth Major Axiom: on Planning
Long range plans engender the dangerous belief that the future is under control. It is important never to take your own long-range plans, or other peoples, seriously.
Minor Axiom XVI
Shun long-term investments.
Strategy
The Twelfth and final Axioms warns about the futility and the dangers of planning for a future one cannot see. Do not get rooted in long-range plans or long-term investments. Instead, react to events as they unfold in the present. Put your money into ventures as they present themselves and withdraw it from hazards as they loom up. Value the freedom of movement that will allow you to do this. Dont ever sign that freedom away.
The Twelfth Axiom says there is only one long-range financial plan you need, and that is the intention to get rich. The how is not knowable or plannable. All you need to know is that you will do it somehow.
 
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