Optimism is a sales tool. It's everywhere. But it's of little use to an investor. Being a successful investor is about making money out of price movements. Being successful in the finance industry is about selling products, and because of that, the industry, the research, the books, the commentators and the majority of investors are all naturally awash with optimism. Everyone knows the market goes down as well as up, everyone knows it’s not possible to call the market consistently, and everyone knows that the most anyone can ever do is best endeavours, but even knowing that no one wants to hear a salesman say that. No one wants the truth. They want to hear optimism, they want to buy optimism, believe optimism and roll in optimism. But in the investment battle, it is a delusion that is best understood and admired but for your own purposes, avoided. Be realistic, not optimistic.

If at first you don’t succeed, quit. I know people, including friends, advisers and clients, that do nothing but consistently destroy value either for themselves or others. People who are wired to failure. It is almost always because they are impatient, unrealistic and short-term focused. Most of them are wonderful characters. Failures but characters. Characters that wake up each day wondering what they can get now rather than what they can build in the end. Characters who are constantly looking for the big win rather than a string of wins. Characters that will get to the end of their investment careers look back and shake their heads. For their own sakes, it would be better if they quit now. But they never will, they can’t, they love it too much even though they’re hopeless at it. You just have to have the courage to recognise it if you are one of them. If you are pretending to invest to cover your constant gambling. If you are continuously short term, you will go nowhere in the long term.

You have to develop your own, on your own. What you learn about trading success becomes your Axioms. What you discover is what will work for you. Everyone is selling their own theory, including Swiss Bankers, but investing is a personal experience developed over the years through experience. No one has the formula for you, and there is no Golden Bullet you can buy despite what many product sellers tell you in their advertisements. Your Axioms come from your experience. It takes time, and the sooner you start, the better.

THE MARCUS TODAY AXIOMS

Marcus Today has a few Axioms that we hope will help you frame yours. Most Marcus Today Members already know them. They include, amongst many others:

• You can time the market.
• Watch the herd don't join the herd.
• Exploit the herd.
• React don't predict.
• The best you can do is wake up every day and make decisions based on the facts, not guesswork.
• There is no certainty.
• You have to take risks to make money.
• "When" you enter or exit is based on how much risk you are comfortable taking.
• Don't care about making mistakes.
• The best you can do is assess the probabilities.
• Value is a tiny part of the equation.
• Australian banks are the best income stocks on the ASX, if not the world.
• Your job is to make money in any price over any period of time.
• Every share price is part value and part sentiment. You have to consider both.
• Use any approach that helps. It's not a war.
• Technical analysis narrows the probabilities and provides discipline.
• Fundamental analysis is good for assessing quality, but not price.
• You will never time stocks using fundamentals.
• Emotion, pride and prejudice breed bad decisions.
• Be Spock. Cold Calculating, logical.
• Learn to sell.
• Don't mistake people with a media gig for people who will make you money.
• Everybody in the industry is selling you something.
• The more confidently someone predicts something, the more eyeballs they get. It doesn't make it more likely.
• Research is not written to make you money.
• The trend is your friend until it ends.
• The share price trend is talking to you. Listen.
• The timeframe for every investment is forever, but only if it goes up forever.
• Choosing what to buy is far less important than what you do after you've bought it.
• These days you do not need to pay for average performance.

I know you won't because you can be bothered, but it would be interesting (for you) to list your own trading Axioms and, in so doing, reinforce them, sieve them, dismiss and develop them. What do you know about successful trading?

If you wrote a book for traders and investors, what advice would you pass on? What would be included in a book called "My Axioms"?

More about the author – Marcus Padley

Marcus Padley is a highly-recognised stockbroker and business media personality. He founded the Marcus Today Stock Market Newsletter in 1998. Over the years, the business has built a community of like-minded investors who want to survive and thrive in the stock market. This is achieved through a combination of daily stock market education, ideas and activities.

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