The Zurich Axioms by Max Gunther

I recently finished reading the Zurich Axioms by Max Gunther. Ever wondered how a landlocked, resource-poor country like Switzerland became wealthy? Max Gunther explores Swiss investment philosophy to determine how the Swiss succeed. The book is excellent brain-food, although there are a few parts that I don't agree with. I've summarised the axioms below. The mentality between the rich and the poor is very large.

ZURICH AXIOMS by Max Gunther

ON RISK

• Worry is not a sickness of 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.

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.

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.

ON FORECAST

• Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly. (take predictions with a grain of salt)

ON PATTERNS

• Chaos is not dangerous until it begins to look orderly. (avoid illusions of order)
• Beware the Historian's Trap (avoid believing that history repeats itself)
• Beware the Chartist's Illusion (accept that trends can break)
• Beware the Correlation and Causality Delusions
• Beware the Gambler's Fallacy (no such thing as a “lucky day”)

ON MOBILITY

• Avoid putting down roots. They impede motion.
• Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.
• Never hesitate to abandon a venture if something more attractive comes into view.

ON INTUTION

• A hunch can be trusted if it can be explained.
• Never confuse a hunch with a hope.

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.

ON OPTIMISM AND PESSIMISM

• Optimism means expecting the best, but confidence means knowing how to handle the worst. Never make a move if you are merely optimistic.

ON CONSENSUS

• Disregard the majority opinion as it is probably wrong. (think for yourself)
• Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.

ON STUBBORNNESS

• If it doesn't pay off the first time, forget it. (never chase)
• Never try to save a bad investment by “averaging down”

ON PLANNING

• Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own or other people's long-range plans seriously.
• Shun long-term investments.