Feedback from last night about this podcast:
Michael, That cocktail quote is bang on. I was involved, as a partner, in a management company, which oversaw the commercial hedging side of a large group of hog producers (over 700,000 hogs per year in various weight stages). Our futures positions were initiated and exited based on a set of rigid criteria which included the bottom-line profit available (position placement) and hog/feed delivery (position removal). We basically applied a ‘hog crush’ to the operations production; the more profit, the further out we went. We had to deal with all of the common fundamental questions of where we saw the market going etc. etc. We became a broken record constantly repeating “When we get this much profit we put this many positions on …” At some point the person’s eyes would glaze over and the conversation would dry up. I think it’s just human nature for people to want the fundamentals. It gives them a sense of accomplishment — however false. Regards, Cliff G.