I wanted to include an interesting thought that came my direction form a fund manager who reads my daily report. Producers might not like what he has to say but I encourage everyone to read it carefully:
Kevin, I have been hearing that farmers are becoming more bullish on the break because they simply don't believe prices can stay down at these levels for an extended period of time. Are they seriously this naive? Do they think its normal practice for US business owners to buy new equipment every year? Do they think its normal practice to buy new trucks and cars each year? Is it normal practice to invest hundreds of thousands in what some would consider unnecessary machine shops, storage that may never be used, barns, etc...? Is it normal practice to be banking enough to afford private planes, exotic 2nd and 3rd homes, race cars, monster trucks, magnificent vacations? I wish this were the norm for US business owners, unfortunately it is NOT. We have seen this happen at various times throughout US history, but remember, the market ALWAYS seems to find a way to make the "easy money" eventually pay the piper.
Need I remind you of those high-rolling home builders or the silicon valleydot.comkings. They were on top of the world for several years. In fact many thought the ride would never end. I remember when US housing prices first ticked back under the so called "cost of production". Most builders just scoffed and said prices will soon rebound, no big fear or concern. As the market continued to unwind, it did what it always does, and that is inflict the most pain on those who have failed to respect its power, and failed to recognize that all good things must one day end. Tell your followers to make sure they are not underestimating the powers of the market. Make certain they understand, like you and I understand, the market can remain irrational much longer than any of them can remain solvent.
They have had a great run, just help them realize the "Free Money" they have enjoyed the past few years is an anomaly, an aberration outside the so called "norm". I learned long ago, "money has no home," it can enter through the front door and slip out the backdoor before you know it. Keep doing what your doing, continue to help them reduce their exposure. These are good people and America needs them!