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Senior Advisor

Is Your Marketing Plan Still On Track?

What has the rally done to your marketing plan?  Validated?  Obsoleted it?  

 

I can tell you that I implemented mine pretty well.  I don't write my marketing plans down, but I spend a lot of time thinking about them.  What do I do now?  I sold so much early that I don't have a lot more I'm willing to sell now and am passing up prices that two months ago I'd have slobbered over.

 

My corn sales are OK.  I had put in some "crazy high" orders last winter and, what do you know, they were touched.  I think I'm done selling corn futures.  I might sell some more cash corn.

 

Soybeans, I'd like to make some more soybean sales but am going to wait, probably till early July before I get too frisky.

 

Have you validated, modified, abandoned your marketing plan?

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8 Replies
Advisor

Re: Is Your Marketing Plan Still On Track?

As far as the sorry state of the recent marketing conversation at this site, I wasn't aware that much of anybody had one unless complaining about the gubmint, the advisors or the CME qualifies. Or the certain knowledge that we're on our way to a crop trainwreck when the crop got planted and we're at 75% G/E .

 

You refer to the Ag Forum section as The Cesspool but I'll submit that some of the same processes are on display here- trash talking, seeking confirmation bias and scorched earth adherence to one's opinions no matter what. Probably serves to demonstrate the general decline of mental health in our country (BTW, forum is a game, this is real).

 

Please forgive my vanity but I bother to post here in hope that it might help somebody. Over 40 years I've made all of the mistakes- that's why I chose the handle a long time ago. I hope nobody hangs on my opinion but rather note the process of strategy and discipline.

 

As far as the mental health question, there's little doubt in my mind that the huge bubble we recently went through (and a lot of sales regret over multiple years) has presented a challenge in making a rational assessment of the situation. That is, by the way, the primary reason why I chose options as the primary tool from the toolbox- because there is a lot of upside if the right conditions present, but also the downside risks sliding into a very disappointing level of profitability.

 

Right now my plan is OK. The 20% cash sales look very good at this moment and that's an amount I can live with if things turn. Wish I'd gotten the corn puts rolled up one more time. Net floor on 80% is approximately 3.80/10.90 and I'm stuck in a holding pattern for now. Might adjust to a slightly more bullish posture if thingsreally shake out (probably re-sell some lower puts) but prudence dictates doing nothing for a while.

 

Right now an average crop, which I now have 100% sold or floored, produces decent profitability but not a 00's kind of home run. If no other opportunities arrive I can live with it but can take some advantage if they do.

 

Big crop and low price produces very good results.

 

Mediocre/poor crop and little price movement is the worst case, which I can live with.

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Advisor

Re: Is Your Marketing Plan Still On Track?

I wanted to come back and add a few things before I go do something useful. As I said above, my work is done for a while, end of day updates will do just fine and the breather will be good for me.

 

http://www.telegraph.co.uk/business/2016/06/05/british-voters-succumbing-to-impulse-irritation-and-a...

 

I greatly revere AEP even when I strongly disagree. And the subject here- Daniel Kahneman. I'll highly recommend his bood Thinking Fast and Slow, about the extraordinarily high capacity for humans to act irrationally.

 

The only point of that here is to note his comment "people rarely experience real regret, they just assess blame and move on."

 

OK, so as per Jim's very timely note about assessing the state of your plan thus far, you can only get better at marketing by making an honest assessment of what you really did, why, and how it worked out, and really only at the end of the year (not that a mid-year adjustment might not be in order, but probably not in order to make up for mistakes already made).

 

As far as Fast Brain mistakes that I noted above-#1- the gubmint. Have I fought City Hall (and almost always lost)? Check, yes I have. Have I made bad sales on the advice of an advisory- most definitely but I was The Decider, they didn't make me do it, I chose to for whatever reason. Have I complained bitterly about the CME, stupid specs, etc. you betcha- although as in my observations all you can do is try to learn the nature of the beast such as that option expiration weeks can magnify moves.

 

And have I ever gotten in an argument with another farmer or somebody over our opinions on the market, gotten stubborn, probably went and sought out some authoritative opinion to back me up (confirmation bias, and you can almost alwasy find something to support what you want to hear) and been stubbornly, totally wrong?  Yep.

 

But if you're not willing to make an honest assessment of what went wrong, or right and how that came to be you're more than likely destined to keep making the same mistakes.

 

Yesterday was kind of the mid-term exam but the whole deal is far from written. People who are digging in may be highly vindicated in the end, and good for them if they do, but hitting a home run on sheer stubborness presents its own mental challenges- primarily the tendency to believe that you really do have magical powers of prediction.

 

BTW, on those marketing mistakes I've made. Had I been a very good marketer the first ten years I farmed on my own the trajectory of my farming career probably would have been different. Even if you suffer some very bad weather years that you can't beat (you're better protected now) the cumulative effect of $25K/yr better over 10 years amounts to a lot more capacity to endure those things and keep growing.

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Senior Advisor

Re: Is Your Marketing Plan Still On Track?

I'll have to read the Kahneman book.

I just read one called Superforecasting by Phil Tetlock.

http://www.penguinrandomhouse.com/books/227815/superforecasting-by-philip-e-tetlock-and-dan-gardner/...

It said things that sound like your message.  He says improvements in how we forecast can be learned.  One of the techniques is to always assess one's judgments and to change the forecast as events change.

The book is a pretty fast read.  I enjoy reading these books but am not sure what I get out of them.  Does anything really stick?

Anyway, after reading your comments I thought I'd mention the book as something you might be interested in checking out.

 

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Advisor

Re: Is Your Marketing Plan Still On Track?

It is probably more of a winter read- requires some attention and consideration.

 

Thanks for the rec.

 

 

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Honored Advisor

Re: Is Your Marketing Plan Still On Track?

To answer your question, it is working just as planned. (It is a plan after all). Since it is not based

on costs in any way, or on subjective price goals, it is doing what it is supposed to do.

 

How does that stack up with the price today? Who cares...evaluating a multi-year plan on June 22nd

of the first year can be very misleading, and cause severely stupid reactionary decisions.

 

We expected a fear rally in May/June, we got it. Positioned to cashflow things nicely out into 2017, with

huge amounts of upside open. Maybe it won't rain on the undeserving folks in Iowa in July? :-) 

 

It might be a good plan, it might be a terrible plan, we won't know until late summer of 2017.

 

While I'll agree with every human craving confirmation bias, this is actually good for farmers. The

same applies to supercomputer algorhythms, only exponentially worse for them.

It means that we get truly ridiculous rallies that we can capture price or volatility from, usually once

or even twice every year. Specs bought billions of bushels of corn and beans to drive values

WAY ABOVE rational levels given current global S&D situations. 

 

The playing field is not level. Farmers are getting screwed at every turn, from not being able to 

deliver on KC wheat futures (40 cents better than cash bids at the same delivery points but the delivery

point won't issue warehouse receipts in 5,000 units which are required by CME for delivery), to releasing reports

during live trading, to HFT front-running and mining stop orders. Just accept the fact the markets

are no longer free and fair, and then find a way to take advantage of the elephants arrogance! 

 

An even better example of abuse was the local NH3 terminal closing down in late May for

SAFETY reasons. Yeah right, local price rallied $100/ton through the remainder of the season.

All those who had inventory on site made out like a bandit, including the subsidiaries of the terminal.

Like I said, free and fair is over and will be until someone actually enforces the anti-trust laws. Like

that will happen in our lifetimes :-)

 

Advisor

Re: Is Your Marketing Plan Still On Track?

Yes, but a gubmint strong enough to take on anti-competitive cartels is strong enough to take my guns away or make me pee in a tranny bathroom.

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Frequent Contributor

Re: Is Your Marketing Plan Still On Track?

maybe said tongue in cheek but right on the money

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Honored Advisor

Re: Is Your Marketing Plan Still On Track?

Nox that is about the most ridiculous thing you have ever posted.

Well then, a government strong enough to jail drug dealers is strong enough to take my guns away?

strong enough to tax carbon .... 

The ludicrous examples are endless.

It isn't strong enough to stop partial birth abortions, pretty sure your guns are safe.

 

Back to Jim's question...such widespread systemic immoral behavior is the way you

destroy civilizations...at least from a historical perspective. Egypt, Greece, Rome.

Unlimited Debt Explosions around the world, global efforts to reduce the value of all fiat

currency, including our biggest customer, a plan is pretty important in my view.

complemented your plan and still do.

 

Just don't use guns to justify corporate abuse. If there is no rule of law, you have anarchy,

and in those cases only evil prevails. Your guns won't save you.

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