The Zurich Axioms: The rules of risk and reward used by generations of Swiss bankers

by Gunther Max

To make any kind of gain in life – a gain of wealth, personal stature, whatever you define as “gain” – you must place some of your material and/or emotional capital at risk. You must make a commitment of money, time, love, something. That is the law of the universe.

Worry is an integral part of life’s grandest enjoyments.

Unless you have a wealthy relative, the only way you are ever going to lift yourself above the great unrich – absolutely the only hope you have – is to take a risk.

In the normal course of speculative play, you must start out with a willingness to be hurt, if only slightly. Bet amounts that worry you, if only a little.

by reducing your greed, you improve your chances of getting rich.

And when you’ve sold, don’t torment yourself if the winning set continues without you. In all likelihood it won’t continue long. If it does, console yourself by thinking of all the times when selling too soon preserved gains you would otherwise have lost.

The inability to jump quickly off a sinking ship has probably cost more speculators more money than any other failing, and has undoubtedly led to the spilling of more gallons of tears than any other kind of financial misfortune.

The Third Axiom tells you not to wait around when trouble shows itself. It tells you to get away promptly. Don’t hope, don’t pray. Hope and prayer are nice, no doubt, but they are not useful as tools of a speculative operation.

Never lose sight of the possibility that you have made a bad bet.

Life never happens in a straight line. Any adult knows this. But we can too easily be hypnotized into forgetting it when contemplating a chart.

Never confuse a hunch with a hope

When you’re feeling optimistic, try to judge whether that good feeling is really justified by the facts.