The Sea Turtle Lesson Every Investor Should Learn

What do Turtles and Stocks Have in Common?

Several years ago, while visiting Mexico, I watched volunteers release nearly 100 baby sea turtles into the ocean. As they made their way toward the water, I learned a startling fact: only a tiny percentage would survive to adulthood. Yet nobody viewed the release as a failure. The goal was never for every turtle to survive.

Why a Few Trades Matter More Than Most

Many investors believe success comes from being right most of the time. The reality is often the opposite.

The famous Turtle Traders experiment in the 1980s demonstrated that some of the world's most successful traders weren't trying to win on every trade. They were trained to do something much more important: keep losses small and let winners grow. Their philosophy was simple: take the trade. If you're wrong, get out quickly. If you're right, stay with it as long as the trend remains intact.

Over time, they discovered that a surprisingly small number of trades generated the majority of their profits. This concept is often called the Pareto Principle, or the 80/20 Rule: roughly 20% of outcomes produce 80% of results. The same principle appears repeatedly in investing. A few stocks create most of the market's wealth. A few months often account for most of a year's gains. 

Investing is remarkably similar to the baby turtles in Mexico, every trade begins with potential, but not every trade will become a winner. Some will fail quickly. Some will never gain momentum. Some will look promising before changing direction. And a select few will become the trades that meaningfully impact long-term results.

I was recently reminded of this lesson through a few trades of my own. I purchased Netflix (my trade referenced in blog) around $100. When the trade failed to act as expected, I exited near $90. At the time, taking the loss was frustrating. Nobody enjoys being wrong. Today, Netflix trades around $72. A similar situation occurred with Palantir. After a significant pullback, I entered around $128. When the trade violated my risk parameters, I exited near $119. Today it trades around $116. Neither exit felt good in the moment, but both protected capital and emotional energy for future opportunities.

What makes those decisions easier is remembering that I don't need every turtle to survive.

In 2025, one of the trades that had a meaningful impact on performance was gold. While many assets struggled through uncertainty and volatility, gold continued to show strength.  Looking back, the gains from that one winning theme were worth far more than the losses from several trades that didn't work out.

The mistake many investors make is becoming emotionally attached to every turtle. They want every trade to work. They hold losers too long. They widen stops. They defend positions that the market has already rejected. In doing so, they often tie up the very capital that could be deployed into a stronger opportunity.

When I truly embrace this mindset, something interesting happens. I no longer need every trade to be a winner. I no longer feel compelled to defend a losing position. I can accept a small loss, move on, and focus my attention where it belongs: on the stocks, sectors, and trends that are proving themselves through price action.

Because portfolios are rarely built by avoiding every mistake. They are built by keeping mistakes small enough that they don't matter.

And often, those few winners are all it takes.