A Turkey Story: Must Read For Stock Traders
INVESTOPAPER
This is the story taken from the book “HOW TO MAKE MONEY IN STOCKS” written by William J. O’Neil. The story emphasizes the everyday dilemma faced by the trader/investor while making decisions.
A Turkey Story
A little boy was walking down the road when he came upon an old man trying to catch wild turkeys. The man had turkey trap, a crude device consisting of a big box with the door hinged at the top. This door was kept open by a prop, to which was tied a piece of twine leading back a hundred feet or more to the operator. A thin trail of corn scattered along a path lured turkeys to the box.
Once they were inside, the turkeys found an even more plentiful supply of corn. When enough turkeys had wondered into the box, the old man would jerk away the prop and let the door fall shut. Having once shut the door, he couldn’t open it again without going up to the box and this would scare away any turkeys that were lurking outside. The time to pull away the prop was when as many turkeys as one could reasonably except were inside.
One day he had a dozen turkeys in his box. Then one sauntered out, leaving 11. “Gosh, I wish I had pulled the string when all 12 were there, “said the old man. “I’ll wait a minute and may be the other one will go back”. While he waited for the twelfth turkey to return, two more walked out on him. “I should have been satisfied with 11.” the trapper said. ” Just as soon as I get one more back, I’ll pull the string. “Three more walked out, and still the man waited. Having once had 12 turkeys, he disliked going home with less than 8.
He couldn’t give up the idea that some of the original turkeys would return. When finally there was only one turkey left in the trap, he said, “I’ll wait until he walks out or another goes in, and then I’ll quit. “The solitary turkey went to join the others, and the man returned empty-handed.
Moral Of The Story
Sell when you have received worthwhile profit. Don’t always try to achieve maximum profit in the hope of ever-rising stock prices. Also, have the courage to sell and cut your losses quickly if you have made the wrong investment decision.
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