“The Goose that Laid the Golden Eggs” is one of Aesop’s most famous fables and the origin of the English idiom “killing the goose that lays the golden eggs” – meaning to destroy a reliable source of wealth through greed or impatience.
There are many versions of the fable, but the gist of the story is about a farmer and his wife who had a goose that laid a golden egg every day. They grew rich, but that wasn’t enough. They supposed that the goose must have a great store of gold in its insides. In order to get the lump of gold, they killed the goose and wound up with nothing.
This could be good advice for investors seeking to exceed the well-established long-term gains potential based on a “buy and hold” portfolio strategy. Leverage and market timing are two of the strategies that some investors have considered in an effort to increase returns while not fully understanding the increased risk.
Investors should also be alert to the potential damage to businesses and economies through over-reach on the part of tax collectors and labor leaders. In other words, you don’t have to kill the goose to do irreparable harm through reduced actual tax collections, despite higher rates, and/or increased business costs, beyond consumers’ willingness or ability to pay.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
