The Zurich Axioms Applied to Property

Zurich Axioms

Max Gunther set forth basic share trading principles called The Zurich Axioms, published in this book. In the current climate where everyone is obsessed about whether houseprices have bottomed, or are due a double dip, it struck me that a little review of these trading principles from the point of view of a property investor might be informative:

• Worry is not a sickness but a sign of health – if you are not worried, you are not risking enough.
• Always play for meaningful stakes – if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either.
• Always take your profit too soon.
• Decide in advance what gain you want from a venture, and when you get it, get out.
• When the ship starts sinking, don’t pray. Jump.
• Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.
• Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly.
• Chaos is not dangerous until it starts to look orderly.
• The historian’s trap – it is based on the age-old but entirely unwarranted belief that the orderly repetition of history allows for accurate forecasting in certain situations.
• The gambler’s fallacy – there’s no such thing as “Today’s my lucky day” or “I’m hot tonight”.
• A hunch can be trusted if it can be explained.
• Never confuse a hunch with a hope.
• If astrology worked, all astrologers would be rich.
• Disregard the majority opinion. It is probably wrong.
• Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.