I cannot say whether it offers much practical advice for investing. What follows is a heavily edited summary of the key axioms and their corollaries. Axiom 1: If you are not worried you are not risking enough. Life ought to be an adventure, not a vegetation, where you face jeopardy and try to overcome it. While facing jeopardy, your natural response is worry. I think most entrepreneurs are risk averse in that they focus on where their skills, expertise, and experience give them an edge.
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I cannot say whether it offers much practical advice for investing. What follows is a heavily edited summary of the key axioms and their corollaries.
Axiom 1: If you are not worried you are not risking enough. Life ought to be an adventure, not a vegetation, where you face jeopardy and try to overcome it. While facing jeopardy, your natural response is worry. I think most entrepreneurs are risk averse in that they focus on where their skills, expertise, and experience give them an edge. One key is lopsided bets where the downside is small but the potential payoff is large.
Axiom 2: Always take your profit too soon: short modest winning streaks are the most common. Decide in advance what you want from a venture, and when you get it, get out. Many new products fail, some work out reasonably well. When the ship starts to sink, jump. Take small losses to protect yourself against big ones. Accept small losses cheerfully as a fact of life.
Expect to experience several while awaiting a large gain. Nothing new ever works. Axiom 5: Chaos is not dangerous until it begins to look orderly. History may or may not repeat. Unless you actually see a cause operating, beware of being fooled by correlation. Go and see.
Do not accept what someone tells you for what you have directly observed. Past success is no guarantee of future performance. Axiom 6. Beware of getting too comfortable. Do not become trapped in a souring venture because of loyalty or nostalgia.
Keep your eyes open to better opportunities at all times. I would make a distinction between being loyal to people and afraid of losing your status or expertise by moving to a new market.
I think social capital—your business relationships and reputation—is very much worth preserving, but technologies and markets have a life cycle than seems to be shrinking. Axiom 7: Your intuition can be trusted if it can be explained. First determine if you have a rich enough experience base to have formed a viable hunch. Axiom 8: No such thing as a sure thing. All swans are white until you have seen a black one.
Know how you will handle the worst. Pessimism applied constructively can increase your confidence by enabling the team to identify and mitigate potential risks and failures. Axiom The majority is probably wrong: think things through on your own. If you are going to follow the herd in an important matter at least do your own investigation.
Focus on learning what works, not proving your first insight correct. Holding loosely to your hypotheses while making a significant investment to test them is a difficult psychological balancing act. William Stafford Axiom Be cautious about long range plans. Planning is useful but you must adjust as you go.
Periodically evaluate all that you have invested in. I think you can have a clear view at the beginning that is very helpful to write down.
So, the first thing you do is to take all the plans off the top shelf and throw them out the window and start once more.
The Zurich Axioms
But not everybody wants to bet, and therein lies a difference of the greatest magnitude. Many people, probably most, want to win without betting. The Axioms propose the opposite. Worry is part of an adventurous life, one that takes personal risks. A life avoiding worry is boring or poor. Managing money is no different. To get rich, you must take risks.