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| I have trained myself to have a speculative mentality. However, I also, over the years, spent hours and hours working up marketing plans for producer friends. It is a challenge. By nature, ag producers are independent of spirit, have egos & spend their lives producing crops & being good stewards. There is a speculative gene in most, which has to be somehow conquered in marketing & attempt to adjust to the fact people simply don't hit the high prices in most cases. Whenever I have sold on a high or bought on a low, there was a lot (mostly luck) of luck involved & most usually the money making trade always requires stress, patience and a few initial losses.
I believe it is also advantageous for the producer to learn to pick and choose price levels-personally, I don't care to trade options, but they are a tool & if you own the inventory, the little bit of premium income adds up & if using puts in a scale-up program the expense is not that bad & permits additional gain, should it be available. Buying puts on market weakness seems a defensive program to me & I prefer programs which approach the market in a more offensive manner. In my case, corn is a good example. I feel the market is within the top 20% of the price range and cannot bring myself to own it for that last final 50 cents or less or slightly more. Too much risk. I am following my technical rules & if wrong...I go. Any marketing strategy should be designed to measure risk and to control as much of it as possible & allow flexibility & also requires some learning process...there is still speculation involved.
The new market atmosphere we have entered & our global economy add elements few of us have experienced. We are sitting ducks if our elected leaders get too careless in the next couple of years as I see nothing but otherwise painful alternatives & a general public which is, and will be, unwilling to adopt and much prefer to place all their reliance on government.
Edited by SeniorCitizen 1/24/2008 14:23
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