Tuesday, June 17, 2008

A trade that should be closed - close it now!

The Thief's Sacrifice - A Story from the Panchtantra

Long ago, there were three friends - the son of a king, the son of a minister & the son of a rich merchant. The three were always together. They took no interest in their studies and did not want to do any work either. Tired of getting admonished by their fathers, the friends took off to earn their fortunes.

Across a forest, each of them found a gem of high value. Worried that the gems could be stolen, they decided to swallow the gems on their return journey. A thief heard them, and joined them while they were returning. Halfway through the forest was a village. The village headman had a parrot which always spoke the truth. The parrot started saying "The travellers have gems". But, the headman could not find any gems, so he let them go. Soon, the parrot started with the same words "the travellers have gems". The friends and the thief were again caught by the headman. Now the headman thought, "My parrot is never wrong. So, the young men must be hiding the gems in their stomach. In the morning I will rip open their stomach and find the gems".

The thief sat thinking. "There is no gem in my stomach," he said to himself. "If I ask the headman to cut me open first, he will not find any gem. He will then think there are no gems with any of us. So he will let the other go. In any case I have to die. I might as well save the lives of these three young men."

The next morning, the headman got ready to cut open the stomachs of the four travellers."Please sir," begged the thief. "Let me be the first. I cannot bear to see my brothers die." The headman agreed. The thief's stomach was cut open. There were no gems inside. "Alas!" the headman cried. "I have killed this man for nothing. My parrot has really made a mistake." So he set the others free.

The three friends continued their journey, sold the gems and became rich. But they remembered with immense gratitude the man who gave up his life to save them.

Moral of the Story: To sacrifice one's life for others is a great deed.

While the story is worth reading for its own sake, there is a lesson for traders. Sometimes, it is wise to let go of a trade (losing or otherwise). Maybe the particular trading position was a favorite. But, if there is reason to close it, do it immediately. Traders have to sacrifice some of their trades to ensure a long trading career.