|
PureBytes Links
Trading Reference Links
|
In keeping with the various recommendations of books that traders on this
list find worthwhile-- another out-of-print text offers an interesting
perspective that will ruffle a lot of feathers.
It might be found at your local library -- A brief summary of the first
chapter follows, as well as a private website that offers a very brief
outline of the remaining chapters.
___________________________________________________
What the Zurich Axioms Are and How They Came to Be
Consider the puzzle of Switzerland. A rocky little place about half the
size of Maine. It has not one inch of seacoast. It is one of the most
mineral-poor lands on earth. It possesses not a drop of oil to call its
own, barely a bucket of coal. As for farming, its climate and topography
are inhospitable to just about everything. It has stayed out of European
wars for 300 years, chiefly because, in all that time, there has never been
an invader who really wanted it.
Yet the Swiss are among the most affluent people in the world. In per
capita income they rank with Americans, West Germans, and Japanese. Their
currency is among the world's soundest. How do the Swiss do it? They do
it by being the world's cleverest investors, speculators, and gamblers.
The Zurich Axioms are about betting to win. Perhaps that makes it sound
like they're for everybody. They are not. Everybody wants to win, of
course. But not everybody wants to bet, and therein lies a difference of
the greatest magnitude. Many people --probably most-- want to win without
betting. That is an entirely understandable wish. There is nothing
reprehensible about it. Indeed, many of our hoariest old Work Ethic
teachings urge it upon us. We are told that risk-taking is foolish. A
prudent man or woman places no bets beyond those that are required by the
unalterable basic terms of human existence. The well-lived life is a
nose-to-the-grindstone life, perhaps somewhat dull but safe. A bird in the
hand, etc...
Well, everybody understands the trade-offs. If you have a philosophical
bias against betting, you will find little that is useful to you in the
Axioms unless, of course, they change your mind.
But if you do not mind taking reasonable risks--or better, if you enjoy
risk, as the Swiss do-- then the Axioms are for you. The Zurich Axioms are
all about risk and its management. If you study the Axioms with the
diligence they deserve, they can enable you to win more of your bets than
you ever thought possible.
Let's not mince words. They can make you rich. The Zurich Axioms are about
speculation and they acknowledge this. It doesn't mean they are about
goofy chance-taking. It means only that they are very frank.
The First Major Axiom: ON RISK
Worry is not a sickness but a sign of health. If you are not worried-- you
are not risking enough.
MINOR AXIOM I. Always play for meaningful stakes.
The only way to beat the system is to play for meaningful stakes. This
doesn't mean you shouldn't bet amounts where a loss would bankrupt
you. You've got to meet certain obligations, but it does mean that you
must get over the fear of being hurt.
MINOR AXIOM II. Resist the allure of diversification.
It forces you to violate the precept of Minor Axiom #1 - that you should
always play for meaningful stakes. By diversifying, you create a situation
in which gains and losses are likely to cancel each other out. You become
a juggler, trying to keep too many balls in the air all at once.
Speculative Strategy:
Specifically, what does the axiom advise you to do with your money? It
says put your money at risk. Don't be afraid of getting hurt a little. The
degree of risk you will usually be dealing with is not hair-raisingly
high. By being willing to face it, you give yourself the only realistic
chance you have of rising above the great un-rich. The price you pay for
this glorious chance is a state of worry. But this worry, the First Axiom
insists, is not the sickness modern psychology believes it to be. It is the
hot and tart sauce of life. Once you get used to it, you enjoy it.
http://www.geocities.com/SouthBeach/4195/axioms.htm
|