What was the meaning of the sentence Mrs. Baker gave Holling to diagram?

In the story, Mrs. Baker gives Holling an interesting sentence to diagram. Here it is:

For so it falls out, that what we have, we prize not to the worth whiles we enjoy it; but being lacked and lost, why, then we rack the value, then we find the virtue that possession would not show us while it was ours.

Teachers often ask their students to diagram sentences so that they can learn the parts of a sentence in the process. For example, the most basic sentence contains a subject and verb. A more complicated sentence will have nouns, pronouns, participles, adjectives, prepositions, conjunctions, and/or articles.
In the above sentence, Mrs. Baker is trying to tell Holling something. Initially, Holling is upset that he has been given an unusually long sentence. He bitterly compares it to the shorter sentences his classmates have been given.
The sentence basically means this: we fail to appreciate the value of a belonging until we have lost it. In other words, we take the gifts in our possession for granted. We fail to appreciate their value until we have lost them.
We can tie this theme to the relationship Holling has with Mrs. Baker. In the story, Holling laments that he must spend Wednesday afternoons with Mrs. Baker. During their time together, Mrs. Baker insists upon reading a few important Shakespearean plays. Holling is initially skeptical about the value of reading Shakespeare. It isn't until later in the story that he begins to appreciate the gift that Mrs. Baker has given him of her time and efforts. So, the sentence is significant in that it teaches an important value.