Stay Optimistic, Buy Fear and Sell Greed

December 25, 2015 01:19 PM
money corn

While many analyst are “doom and gloom” on agriculture Mark Gold, who’s been marketing grain for more than 30 years, says “that’s a lot of nonsense”.

He told “AgDay” host Clinton Griffiths the guys telling farmers a few years ago that America couldn’t ever grow enough grain and that markets were in a new paradigm and the price would never fall are the same guys saying prices are never going to go up.

“It’s a bunch of nonsense,” he says.

Watch the entire AgriBusiness segment from “AgDay” below:

Gold encourages farmers to step up their marketing game and start buying fear, and selling greed.

“When we get to $16 or $18 beans, and $7 or $8 corn I don’t want you to be greedy that it’s going higher I want you to be fearful it’s going down and do some marketing,” he says. “When we get down here to $3.50 corn and $8.50 soybeans this is when I want you to be a little bit greedy. If you’re selling grain, buy back a call and keep that upside open.”

While he admits it’s a contrarian point of view but says there’s prime example of how successful you can be.

“If you want to know how well it works ask Warren Buffet,” he says. “He buys the fear and sells the greed.”

Gold says he wants you to get into that mindset.

“When we have lower prices we can go higher, [you should] maintain the upside open with a call option,” he explains. “When you get high either sell some grain or protect it with a put option.”

Sound optimistic? He is.

“I believe that in like every other year since 1972 the American farmer will have at least one great marketing opportunity to price or to protect their grain at profitable levels,” he says. “Will they take advantage of that? I hope they do.”


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