For businesses to be successful, they must seize opportunities. Therefore they must be good at taking risks and minimizing losses. As Jim Rohn said “Life is all risky, if you think “trying” is risky, wait til’ they hand you the bill for NOT trying. Wait til’ you get the tab for not investing. It’s all risky, getting married is risky, having children is risky. Don’t worry, in life, you’re not going to get out alive”
A business is a form of investments of resources in an effort to tap an opportunity. It will be wonderful to have a framework that can guide us in taking risks.
The following axioms are extracted from the book “The Zurich Axioms” written by Max Gunther; published by Souvenir Press (ISBN 978-0-285-63095-6). At the end of each chapter, the author laid out a speculative strategy.
Major Axiom One: Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.
Minor Axiom 1: Always play for meaningful stakes
Minor Axiom 2: Resist the allure of diversification
Major Axiom Two: Always take your profits too soon.
Minor Axiom 3: Decide in advance what gain you want from a venture, and when you get it, get out.
Major Axiom Three: When the ship starts to sink, don’t pray. Jump.
Minor Axiom 4: Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.
Major Axiom Four: Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly.
Major Axiom Five: Chaos is not dangerous until it begins to look orderly.
Minor Axiom 5: Beware the historian’s trap.
Minor Axiom 6: Beware the chartist’s illusion.
Minor Axiom 7: Beware the correlation and causality delusions.
Minor Axiom 8: Beware the gambler’s fallacy.
Major Axiom Six: Avoid putting down roots. They impede motion.
Minor Axiom 9: Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.
Minor Axiom 10: Never hesitate to abandon a venture if something more attractive comes into view.
Major Axiom Seven: A hunch can be explained if it can be explained.
Minor Axiom 11: Never confuse a hunch with a hope.
Major Axiom Eight: It is unlikely God’s plan for the universe includes making you rich.
Minor Axiom 12: If astrology worked, all astrologers would be rich.
Minor Axiom 13: A superstition need not be exercised. It can be enjoyed, provided it is kept in its place.
Major Axiom Nine: Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
Major Axiom Ten: Disregard the majority concern. It is probably wrong.
Minor Axiom 14: Never follow speculative facts. Often the best time to buy something is when nobody wants it.
Major Axiom Eleven: If it does not pay off the first time, forget it.
Minor Axiom 15: Never try to save a bad investment by “averaging down”.
Major Axiom Twelve: 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.
Minor Axiom 16: Shun long term investments.
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