Yes, it is a superb book... The axioms by the Zurich... the rules of risk and reward used by generations of Swiss bankers... So, how superb it is? The axioms as listed below are good enough to "seduce" me, LOL...
Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough. ~~~ What a quote! The wording of "worry" becomes so positive under Max Gunther. The best part is... this is a quote from someone in year 1985. Incredible!
You may think you'd rather be an investor than a speculator. Being an investor sounds safer. ~~~ Hmm.... "Speculating" is never a good word. But, I love the word so much!!! LOL.
Gerald Loeb: "All investment is speculation. The only difference is that some people admit it and some don't." ~~~ Hmm... Like I said above... I love the word! So, I am proud to be part of it!!!
Diversification, while reduce your risks, reduce by the same degree any hope you may have of getting rich. ~~~ Very true.... Warren Buffet always questioning the effectiveness of diversification. In fact, Hong Kong tycoon Lee Ka-Shing used to said that he focus on every single project until it comes to the end before moving on to the others despite his company's public image as a huge conglomerate.
You make more money when you control your greed ~ Always take your profit too soon. It refers to the need to cash out before a set of winning events has reached its peak. Don't ever try to squeeze the last possible dollar from a set. ~~~ Sounds a bit contradict... in fact, very controversial too, LOL. I agreed that we just cannot squeeze the last possible dollar from a set. That is why I hardly look at the so called "peak" or bottom. In fact, I am willing to let go certain portion as long as the said portion does not affect hugely and damages is keep at certain limit. However, I am never a believer of profit taking. The reason on why I am not looking to squeeze the last possible dollar is actually due to the facts that I know I would not be able to search for the exact peak or bottom. Since I know I cannot predict, I found no reason to take profit without a valid reason. Ok, a small flaw from the Swiss banker... LOL
Knowing how to get out of a bad situation may be the rarest of all speculative gifts. It is rare because it is difficult to acquire. It takes courage and a kind of honesty with a cutting edge like a razor blade.~~~ This is tough although it is a must! I believe not many can act firmly even when there is a plan in advance. However, it is a must since it limits the financial damages.
When the ship starts to sink, jump. Note the wording: when it starts to sink. Don't wait until it is half submerged.~~~ Again... tough but a must!
If you hope to get anywhere as a speculator, you must get our of habit of listening to forecasts... Of course, they are right sometimes, and that is what makes them dangerous.~~~ It reminds me of the noises as mentioned by Nate Silver: The economic data is very poor and the theory is very weak!
Human behaviour cannot be predicted. Since all money -world forecasts are about human behavior, you should not take any of them seriously.~~~ Bingo!!!
Chaos is not dangerous until it begins to look orderly. ~~~ What a quote!!!
History repeats itself sometimes. But, most often it doesn't, and in any case it never does so in a reliable enough way that you can prudently bet money on it. ~~~ Exactly, that is why past performances do not reflect current results!!!
Representing numbers by lines on graph paper can be useful or dangerous. It is useful when it helps you visualize something with greater clarity than you could achieve with numbers alone. It is dangerous when it makes the thing represented look more solid than it really is.~~~ This issue had been argued for decades... My view remains that whichever ways work for you; stick with it! I am with the author in this case....
Gambler's Fallacy tends to encourage that failure, for it engenders the feeling that one is temporarily invincible. That is a dangerous feeling to have. Nobody is invincible.~~~ Yes... even the "Invincible Gunners" fail completely at the moment, LOL.
Never get attached to things, only to people. Getting attached to things decreases your mobility, the capacity to move fast when the need arises. Once you get yourself rooted, your efficiency as a speculator goes down markedly.~~~ How true... "Thing" should never be a factor in deciding speculation. End of the day, money-world forecasts are purely about human behaviour!
No matter how good a hunch feels, don't let it lull you into a state of overconfidence. Stay worried. Intuition can be a useful speculative tool, but it isn't the long-sought, infallible formula for 100 percent correct money decisions. ~~~ In my humble opinion, intuition itself never exists. As such, I found no logic to even discuss it!
Optimism means expecting the best, but confidence means knowing how to handle the worst. Never make a move if you are merely optimistic. ~~~ Again, optimism never exists for a mechanical trader. It is more about data and nothing more important than data. However, I admit that I am an optimistic person, LOL.
Perseverance is like optimism: It is certainly good advice for spiders and kings, who are usually born rich. For ordinary men and women like you and me, struggling to make a buck, it is advice that should be heeded selectively. ~~~ Ha... I like the way the author describes perseverance with the example of spiders and kings. Yes, we respect the magnificent attitude by spiders in creating the web. But, we just envy kings who were born with silver spoon... The author's main point is, you must defeat the wish to persevere when perseverance will lead you astray...
Don't try to make long range plans or allow other people to make them for you. They will only get in your way. Instead of attempting to organize your affairs to accommodate unknowable events in the future, react to events as they unfold in the present. When you see opportunities, go for them. When you see danger, jump out of the way. ~~~ I remember how Michael Covel said this in his famous book, Trend Following: "It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change." As such, Michael Covel emphasizes on "Now" rather than past or future. Coincidentally, Swiss bankers seem to think so too...
The long term investors are the big gamblers. Betting on tomorrow is chancy enough. Betting on a day twenty or thirty years in the future is absolutely crazy. ~~~ It is again about the "Now" as emphasized by Michael Covel....
On life insurance... he wants you to commit your good money for twenty or thirty years, but the deal is probably less long-term for him than it is for you. Meaning, he collects a good proportion of those thirty years' commissions in the first year or two. ~~~ What a statement to stop those agents from harassing me in the future, LOL. No offence to agents around, but I will only buy it for my family members... Well, similar to the author's opinion; it is more about pay off on my death and the cheapest insurance terms are good enough to serve this purpose.
Wow, wow, wow... what a book with tons of great axioms!!! In my humble opinion, it is not only some axioms. It serves as splendid wisdoms and great reminders for those who are serious in the world of speculating. Special thanks must be given to the buddy who awards me with this book. Hey, friend, what a nice gift!!! Thank you so much!!!
In fact, this is the first book that criticizes my idol, Jessie Livermore. Perhaps, criticizing is not the best word to describe the author's view. I think, "A concreate yet subjective opinion" are more suitable. All right... ok... it is "suitable" since it represents my view too, LOL.
To be honest, this book is really a book with tons of values. Although it is full of theories rather than practical examples, I believe it creates a great groundwork for speculators around the world. Having said that, I highly recommend this book for anyone who is serious to build up mental strength towards the success route of speculation. Rating wise; well, zero flaws... so, it is a 10/10!!! This book has earned a place on my very short list of valuable books!
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