Investing: The Last Liberal Art (Columbia Business School Publishing)

by Robert G. Hagstrom

Vega’s Confusion of Confusions is easily summarized. In the Second Dialogue, Vega lists four basic principles of trading—as relevant today as they were 325 years ago: The first principle: Never advise anyone to buy or sell shares. Where perspicacity is weakened, the most benevolent piece of advice can turn out badly. The second principle: Take every gain without showing remorse about missed profits. It is wise to enjoy what is possible without hoping for the continuance of a favorable conjuncture and the persistence of good luck. The third principle: Profits on the exchange are the treasures of goblins. At one time they may be carbuncle stones, then coals, then diamonds, then flint-stones, then morning dew, then tears. The fourth principle: Whoever wishes to win in this game must have patience and money, since values are so little constant and the rumors so little founded on truth. He who knows how to endure blows without being terrified by the misfortune resembles the lion who answers the thunder with a roar and is unlike the hind who, stunned by the thunder, tries to flee.