The Best Investment Lesson

This is an old story that I like to tell several times a year. Throughout my career on Wall Street, I've been fortunate to meet some folks that have provided me with a million dollar education. Once again, if you heard this story, please forgive me. Read on.

One day, a man approaches an innocent bystander and asks, "Would you like to buy a can of tuna fish?"

The person perplexed as to why someone would approach him with the proposition to buy a can of tuna fish replies, "How much?" After being told that the can of tuna fish is $4.00, he replies, "That's crazy, I can buy a can for $0.89 in the local supermarket."

After some persuasion and after being told that this is the best can of tuna fish he would ever eat, he buys the can.

After holding the can for a few weeks, the second man decides to employ the same tactic. He finds a consumer and after hesitating for a few moments, he asks, "Would you like to buy a can of tuna fish?" The man asks how much and he replies, "$8 dollars."

The consumer replies, "That's ridiculous. Tuna fish is less than $1.00 a can."

But by using the almost exact pitch that he had heard just a few weeks earlier, he is able to sell the can for $8 or a 100 percent profit in about three weeks.

The third man holds the can for a few days and inexplicably decides that he doesn't want the can of tuna. He approaches someone at the local store and whispers, "Would you like to buy this can of tuna?"

The middle aged woman who he approached asks, "How much?"

In a voice that can be barely heard, he says, "$16 dollars."

The woman, laughing uncontrollably replies, "That is the most foolish thing I have ever heard in my life." She states that the price is 16 times the going rate for a can of tuna.

The man, convinced that the woman should buy says, "Maam, I'm telling you this is great tuna. Just buy it!!"

After hesitating for a few moments, the woman buys the can of tuna.

A few days later, the third man is approached by a crazed, irate woman. The same woman that he had sold the can of tuna fish to only days earlier.

"You ripped me off!!" she screams. "You ripped me off!!"

"Hold on, what happened?"

She screams, " I bought that can of tuna and ate it and it was an ordinary can of tuna. I want my money back."

The man, not believing the mistake the woman had made says, "Lady, it's not my fault. You have to understand, there are 2 types of tuna. Real tuna and trading tuna. It's not my fault that you thought that you had real tuna. I never said that."

And so, the lesson was learned.
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Because, most of the stocks that we buy are trading fish. Don't ever believe that you have the real thing until you are really sure. We trade trading fish and we consume and hold on to the real thing. Just ask Mr. Buffett. He never sells his fish.