Holding a cup and overfilling it
Cannot be as good as stopping short
Pounding a blade and sharpening it
Cannot be kept for long
Gold and jade fill up the room
No one is able to protect them
Wealth and position bring arrogance
And leave upon oneself disasters
When achievement is completed, fame attained, withdraw oneself
This is the Tao of Heaven
Interpretation (from truetao.org)
If you keep filling a container with liquid until it overflows, things will get wet and messy around you. It is better to stop just short of fullness.
Similarly, if you pound a blade repeatedly and sharpen it too much, you end up with a blade that is easily broken and won't last very long.
A room that is full of treasures becomes the target of thieves and robbers. It cannot be safeguarded forever.
If you become arrogant as the result of great wealth or high position, you are sure to cause yourself big problems, one way or another.
Once you have achieved success and fame, it is best to step gracefully, quietly aside. This is the best way to live - in full accordance with the Tao.
Notes
The central idea: doing anything to excess is a bad idea. Do just enough and nothing extra.
In our translation, the line "cannot be kept for long" is not referring to the activity of pounding and sharpening a blade. It's a reference to the over-sharpened blade that can easily break and therefore cannot last.
Another interpretation of the above is that the sharp edge of the blade cannot be maintained for long.
The "withdraw oneself" phrase does not mean to retreat from society and become a hermit. It means there is no need to brag about your achievements, take on pompous airs, or put on showy displays. Such egotistic acts invariably bring negative consequences.