Producers, It's Time to Be Honest
Aug 20, 2012
Producers should take some time this week and ask yourselves a few very important questions. Many times it is not so much knowing or understanding where the market is heading, but rather knowing and understanding your own personalities, traits and tendencies that will influence your "next" decision.
- Question #1 - How many bushels would you like to have sold for cash flow purposes, delivery dates, quantities, etc...?
- Question #2 - How long are you comfortable storing the remaining bushels, and at what prices are you willing to start selling those bushels? Be specific.
- Question #3 - Will you realistically pull the trigger on sales at $7.00 if you didn't pull the trigger at $8.00, $7.75, $7.50 or $7.25??? Be honest with yourself. If your going to beat yourself up over missing the highs, then don't be afraid to sell now, these are great prices.
For many of us, the biggest mystery is not WHERE the markets are headed but rather how we will react before, when or after the markets get there. My point is you have to be honest with yourself and recognize and understand what your "NEXT" move is likely going to be. For me, on the speculative side, I have had to force myself this entire time to stay long soybeans. I simply knew that if I took all of my long positions off the board, I would probably miss the entire move. I knew I would be too stubborn to get back in on the highs of the rally. Point being, if I would have taken profits on all of the NOV12 bean contracts I was long from the $13.20 area at $14.00, more than likely I would have never gotten back in because I would have been waiting for a pull back or simply refused to buy back in on the new highs. I am staying in some of my long soy positions right now even though I think prices may temporarily break during the next couple of weeks on improved weather conditions. I am afraid if I liquidate my "next" move could get me in big trouble. It's like when you buy a stock at $50 and take profits on it when it goes to $100. You know it is a great company, but you are waiting for a pull-back before you get back in. You try and get cute and pick a little extra money. The next thing you know the stock is at $150 and you absolutely refuse to pay this much, remembering back to when you paid $50 per share. A few months later the stock is at $200 and you are still on the sideline waiting for a pull back. A few more months go by and the stock is at $400, then $500, then $600. Sound familiar??? Unfortunately that was the way I played a majority of my Apple stock. I was simply too stubborn to buy back in when it was making new highs. My point is you have to know your own tendencies and personalities. If you are not going to make a sale up here at $8.00 then at what price will you pull the trigger? If you don't pull the trigger now and the market slides to $7.50 will you actually make a sale or will you be to pissed off at yourself for not selling above $8.00 and stubbornly hold on? What will you do if...
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