Axioms

Axioms & Words From Sages

Trite words sometimes provide wisdom for those wise enough to put them in perspective.

The editorial staff of Understanding Markets™ offers some phrases that it stretches to call axioms. Axioms are always valid in mathematics, however when investing they should be used only to provoke thinking and analysis.

When valid they may be loosely referred to as 'axioms'. Most of the time they should be referred to as thoughts that are valid except when they are not.

It is risky to give too much weight to these words, but they do serve as catalysts in decision making.

-- Take your fair share out of the middle and leave something on the upside for the next guy.

To assist your decision of when to sell, ask yourself, "Does there remain an incentive for a potential buyer to come in and buy?" That potential buyer must perceive more upside or he will not buy from you.

-- No number is too strange.

Before buying, ask yourself: "What price might this item drop to after I buy it?"

-- The trend is your friend.

The net actions of all investors and speculators is reflected in the trend of items and markets. The trend represents the composite results of all relevant trading activity. It may change at any instant for no apparent reason.

-- "If it don't go up, don't buy it."
Will Rogers, on investing

This one speaks for itself.

See also: Introduction

The investment axiom that is always valid: Caveat Emptor

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