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Glasgow, Ky | That was one of the most understandable and accurate explainations of the price setting mechanism in the market that I have ever read. My thanks to you for sharing this with us. It is well worth keeping and sharing with others.
The essence of what you say is pretty much what I have come to believe based on personal experience in business. No one knows in terms of specifics what the market is going to do. One can only determine general trends and use historical data to predict the future.
One thing that has stayed with me through the years was the lesson I have learned about the herd mentality. I have seen it happen many times. Cattle prices go up, every one wants them. Cattle prices go down, very few want them. Who makes the most money over the long haul? Stood at a land auction in 1985 and getting bids was like pulling hen's teeth. The same people who had been bullish to a fault about land would not make a bid, at any price. I learned that day the true workings of the herd mentality. By the way, the land sold for less that $500 per acre and would now bring over $3,000 per acre.
Emotions play a significant role in the decision making of many people. Along with emotions come ego. Either one of these will cause problems. No exceptions. My background is in accounting. Just gather the data, analyze it and make an objective decision.
One thing in particular that SC pointed out was the ability to admit a mistake and go on. We, as a people, seem to be so fixated on getting the "top price" when marketing. Anything less than that is considered a mistake. Anytime you are making money you are not making a mistake. When judging the success of a business and it's future potential do we look at one year's results or want several years of data? Do we look at just the average price per bushel received or ratio's that measure the health of the operation as a whole? One can be a great marketer but be very much below the norm in production and overall management. The key is being wise and humble enough to know your weaknesses and obtain expert advice.
Thanks to SC and all of you for your input. Whether I agree with you or not I appreciate reading your thoughts on things. Diversity is what make life interesting.
Edited by howmuchisenough 2/22/2008 07:30
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