The Zurich Axioms
/The Zurich Axioms by Gunter, Max
1. On Risk: Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.
· Always play for meaningful stakes
· Resist the allure of diversification
2. On Greed: Always take your profit too soon.
· Decide in advance what gain you want from a venture, and when you get it, get out.
3. On Hope: When the ship starts to sink, don’t pray. Jump.
· Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.
4. On Forecasts: Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly.
5. On Patterns: Chaos is not dangerous until it begins to look orderly.
· Beware the historian’s trap.
· Beware the chartist’s illusion.
· Beware the correlation and causality delusions.
· Beware the gambler’s fallacy.
6. On Mobility: Avoid putting down roots. They impede motion.
· Do not become trapped in a souring venture because of sentiments like loyalty or nostalgia.
· Never hesitate to abandon a venture if something more attractive comes into view.
7. On Intuition: A hunch can be trusted if it can be explained.
· Never confuse a hunch with hope.
8. On Religion and the Occult: It is unlikely that God’s plan for the universe includes making you rich.
· If astrology worked, all astrologers would be rich.
· A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.
9. 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.
10. On Consensus: Disregard the majority opinion. It is probably wrong.
· Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.
11. On Stubbornness: If it doesn’t pay off the first time, forget it.
· Never try to save a bad investment by averaging down.
12. 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 people’s, seriously.
· Shun long-term investments.
Mats Larsson, September 27 2018
P.S. Please see the review of the book The Zurich Axioms for more color on the philosophy presented. Or read the book.