YESTERDAY'S NEWS-Knife-FORK-Spoon

[DOC HARRIS]

Yesterday's News is REALLY today's News! As I write this topic, The "OCTOBER SURPRISE" of 2008 - the Stock Market p-l-u-n-n-n-g-g-e has just turned the news media up-side-down! The sky has fallen! There is a Wolf in the sheep flock! The worst has happened! The fingernails are completely GONE! What to do? What to do? What DO you do??!

Well - we will get a lot of valuable information and useless advice from many different sources, but the valuable conclusive evidence and iron-clad proof that "Chicken Little" is NOT the sooth-sayer, prognosticator, or prophet of doom that some among us are eager to embrace, occurred just as I was framing this topic in my mind. The Stock Market experienced the largest 'single-day' drop in history - a 782 point drop, as a matter of fact, and, as of a few minutes ago, recovered 463 points (both figures have been 'rounded out - for those in Rio Linda), and the Market is functioning - as to be expected.

Now, this is not to say that we are out of the woods. Not by a long shot in a short room! But the point is - the system works! Particularly for those who have the guts to help it work! Example at hand: this morning, Donald Trump invested several Hundred million dollars in buying a high-level Housing Development (I have forgotten where) because, as he said, "I got it for MILLIONS LESS than I would have had to pay otherwise". (Before the financial crisis).

Granted, Donald Trump has the $Bucks$ available for that kind of investing. But this is exactly the point that I have been striving to make recently. IF, and notice that I said IF, you are in a financial, emotional, progressive juncture, or time, in your beef business career, or even if you just wish to improve your seedstock base a little bit, NOW IS THE TIME TO DO IT!

"They" say (whomever "they" are) that nothing is as old as yesterday's news. Today's news is pretty fresh in our mind's at the moment! And we are being continually bombarded and overwhelmed by the blathering News Media yapping about ". . .crooked Congressmen (and Women!), crooked CEO's, and the Stock Market crashing . ." to the point whereby we go to bed at night and cram a pillow over our heads in an effort to shut out the high-pitched lying and chatter of the ever-present blabber-mouths. No one with whom I have talked recently really enjoys this flow of garbage which is drowning common sense and logical reasoning!

But - there is a bright side to the tempestuous whirlwind! That ray of sunshine is the current "Fall Beef Cattle Sales" schedule that is presently on-going.

"They" also say that when you come to a "FORK" in the road - - TAKE IT! There has been an overwhelming amount of discussion on this Forum recently concerning the opportunities which are possible in the improvment of one's seedstock genetics by the acquisition of cattle (Donor's AND Bulls) which, in another time and era, might never have become available.

But - That was Then - - This is NOW! It is time to take stock of your current "Business" position, analysing ALL aspects of your circumstances, take the "FORK" in the Road, "CARVE" out what you REALLY need, "SPOON" up the goodies and gravy, and take a confident step forward. Don't overload your plate, but take only what you need, and KNOW how to use it to your advantage.

When I was in the Military, there were signs in the mess halls that read, "Take All You Want - BUT - Eat All You Take!"

Good advice.

DOC HARRIS

 

[HerefordSire]

Do not do what Donald Trump does:

"Financial problems (1989–1997)
By 1989, the effects of recession left Trump unable to meet loan payments. Trump financed the construction of his third casino, the $1 billion Taj Mahal, primarily with high-interest junk bonds. Although he shored up his businesses with additional loans and postponed interest payments, by 1991 increasing debt brought Trump to business bankruptcy[4] and the brink of personal bankruptcy. Banks and bond holders had lost hundreds of millions of dollars, but opted to restructure his debt to avoid the risk of losing more money in court. The Taj Mahal re-emerged from bankruptcy on October 5, 1991, with Trump ceding 50% ownership in the casino to the original bondholders in exchange for lowered interest rates on the debt and more time to pay it off.[12]

On November 2, 1992, the Trump Plaza Hotel was forced to file a prepackaged Chapter 11 Bankruptcy protection plan after being unable to make its debt payments. Under the plan, Trump agreed to give up a 49% stake in the luxury hotel to Citibank and five other lenders. In return Trump would receive more favorable terms on the remaining $550+ million owed to the lenders and retain his position as chief executive, though he would not be paid and would not have a role in day-to-day operations.[13]

By 1994, Trump had eliminated a large portion of his $900 million personal debt[14] and reduced significantly his nearly $3.5 billion in business debt. While he was forced to relinquish the Trump Shuttle (which he had bought in 1989), he managed to retain Trump Tower in New York City and control of his three casinos in Atlantic City. Chase Manhattan Bank, which lent Trump the money to buy the West Side yards, his biggest Manhattan parcel, forced the sale of a parcel to Asian developers. According to former members of the Trump Organization, Trump did not retain any ownership of the site's real estate - the owners merely promised to give him about 30 percent of the profits once the site was completely developed or sold. Until that time, the owners wanted to keep Trump on to do what he did best: build things. They gave him a modest construction fee and a management fee to oversee the development. The new owners also allowed him to put his name on the buildings that eventually rose on the yards because his well-known moniker allowed them to charge a premium for their condos.[15]

In 1995, he combined his casino holdings into the publicly held Trump Hotels & Casino Resorts. Wall Street drove its stock above $35 in 1996, but by 1998 it had fallen into single digits as the company remained profitless and struggled to pay just the interest on its nearly $3 billion in debt. Under such financial pressure, the properties were unable to make the improvements necessary for keeping up with their flashier competitors.

Finally, on October 21, 2004, Trump Hotels & Casino Resorts announced a restructuring of its debt.[16] The plan called for Trump's individual ownership to be reduced from 56 percent to 27 percent, with bondholders receiving stock in exchange for surrendering part of the debt. Since then, Trump Hotels has been forced to seek voluntary bankruptcy protection to stay afloat. After the company applied for Chapter 11 Protection in November 2004, Trump relinquished his CEO position but retained a role as Chairman of the Board. In May 2005[17] the company re-emerged from bankruptcy as Trump Entertainment Resorts Holdings.[18]"

http://en.wikipedia.org/wiki/Donald_Trump

 

[RD-Sam]

Guess Doc didn't do his homework on the Donald. :lol2:

 

[nap]

I agree, I think Trump is a poor example as economic guru who happens to have way more money than he knows what to do with. I certainly wouldn't consider him a credible economic adviser. I disagree that this is the time to jump into the cattle business whole hog. To be aggressive in these uncertain times is pure folly. I think we are on a different playing field and are about to go through some very uncertain times. I think it is time to sit back and watch and think about what is best for own particular situation. There could be a lot more turbulence ahead.

 

[HerefordSire]

Guess Doc didn't do his homework on the Donald. :lol2:

Doc brings allot to the table though. He is generally correct. In other words, sometimes we can get ahead faster by doing the opposite of conventional wisdom. Most would think buying into this market is insane. However, people seem to overreact with their emotions. Markets move too high, aka bubbles, and too bloody low. There is real value in times like these. Fear and greed should be thoroughly understood along with psychology. He is probably correct this time also and under normal circumstances I would agree with Doc. These times are different, unlike the last 80 years or so in which I have studied. Caveat Emptor!

It is much less risky to buy assets (obtain risk) in increasing markets than in decreasing markets. Likewise, it is less risky to sell assets (obtain risk) in decreasing markets than in increasing markets.

 

[HerefordSire]

I agree, I think Trump is a poor example as economic guru who happens to have way more money than he knows what to do with. I certainly wouldn't consider him a credible economic adviser. I disagree that this is the time to jump into the cattle business whole hog. To be aggressive in these uncertain times is pure folly. I think we are on a different playing field and are about to go through some very uncertain times. I think it is time to sit back and watch and think about what is best for own particular situation. There could be a lot more turbulence ahead.

He has got pretty good taste in women though. Donald is a salesperson and a negotiator. I like him. I wouldn't buy cattle if he is buying positions in real estate. I like Warren Buffet. I wouldn't buy cattle if he is buying positions in General Electric. Cattle have to be fed. They consume resources. Resources that require very high inputs, just like Donald's ex-wifes and wife. Sam Walton drove an old beat up truck to work every day. I liked Same Walton. I wouldn't buy cattle if he was still alive and buying Chinese spinach. Calf prices are weak. One cow produces one calf per year. It make take five calves to pay for one cow. I would rather wait to buy when one calf can pay for five cows without consuming high dollar resources.

 

[RD-Sam]

I'm going to a couple of sales, if I can get a really nice cow at a cheap price I will probably buy. I'm thinking if it takes three or four years to turn around I will still be about even, and I will be ready when it turns around.

I recall HS and I believed the market would crash in October, well, October is here and just look at the market. :lol2: So how low will the Dow Jones go before it turns around, 7k? :drink:

 

[HerefordSire]

I'm going to a couple of sales, if I can get a really nice cow at a cheap price I will probably buy. I'm thinking if it takes three or four years to turn around I will still be about even, and I will be ready when it turns around.

I recall HS and I believed the market would crash in October, well, October is here and just look at the market. :lol2: So how low will the Dow Jones go before it turns around, 7k? :drink:

DJIA can easily hit 8,900 this time down. Can go much lower after hitting this next peak. Just guessing, I would say 3,000 - 5,000 or less, as long as Bazooka Ben Bernanke in in there trying to teach class in real time. If he steps down, and he will (forced), market will start running upward again. He should have already cut rates to 1%. $2T already lost in retirement funds. Thanks Ben. Will lose another $1T before he steps aside. Now back to cattle. Don't buy any cattle unless you know the cow will have triplets and Jupiter is aligning up with Saturn and Uncle Ben resigns.

 

[RD-Sam]

:lol2: I might gamble and buy one or two, but you can bet I will be picky! :nod: Now where is that bottle? :drink:

 

[HerefordSire]

:lol2: I might gamble and buy one or two, but you can bet I will be picky! :nod: Now where is that bottle? :drink:

I am scared to watch my cows eat. They eat more than a growing teenage male. Why don't you grab a case instead of a bottle.

 

[RD-Sam]

Nah, just do a little sippin and kick back and watch how all of this plays out. Hope you got out of the market in time, one poor soul I know told me he lost over a 100k last night, another tonight just told me he lost over 10k. I feel sorry for everybodies retirement plans too, that can't leave you with a warm fuzzy feeling. :cry2:

 

[fourstates]

Anybody buying stock? (I don't mean cattle.)

 

[1982vett]

Anybody buying stock? (I don't mean cattle.)

Yep, right or wrong, I put some back on yesterday and today that I took off 2 weeks ago.

 

[bgm]

Doc,

Evidently you had this forum confused for a place where people can discuss serious cattle issues. It's obviously just a sounding board for our resident soothsayer to predict yet again the sky is still falling and will continue to do so for sometime to come.

The issue of the available pool of genetics during this period is real. It's an opportunity that should be recognised and taken advantage of by those with the ability to do so. There are many reasons to do it as you've mentioned in the past. I'm sure there are many reasons why people can't. Lack of available cash, limited grass or hay, etc. The poorest excuse I can think of not to is fear. As FDR said during another dark economic time, the only thing to fear is fear itself.

As for my plans, I do not have an abundance cash, or grass, but I will be culling weaker animals and replacing them with better genetics when and where I have opportunity. I also recognise the opportunity to lease more land not being used by people who are selling out and there are a few around me that have. I have already bought alot of hay from those situations and have a 2 year supply for the first time.

So soothsayer, my glass is not half empty, it's half full, and through my rose colored glasses I can see it filling further with the opportunities ahead.

The only way to keep from losing your shirt is to roll up your sleeves and get to work. I'm not afraid of hard work and find it preferable to hiding in the corner worrying.

I too think that changes are coming to our industry, but not from the harsh economy, but from RFID. It's my belief that RFID will make it possible for small producer to be paid not just for pounds produced, but for quality. That is reason enough for anyone with fore thought to try to seize what they can of the current available genetics. Or you can just wait this out until the current available cattle are gone and the prices go back up to improve your herd, the remaining seedstock producers will just love you.

 

[RD-Sam]

I think you might need a course in simple economics, do you have any idea what happens when people loose their jobs, their homes, their cars, all their possessions? It a simple trickle down affect, and unless you have some way to be immune from it, it will also affect you.

If you have the money set aside to sell off your culls and buy better at anywhere from double to ten fold the cost, more power to you. Glad you have the two year supply of hay too, at least you won't have to buy any in the near future to feed them, but what happens when that is gone and the beef market has died off because everybody is broke, does that still compute for you?

The sky may not be falling, but the market sure is, in case you haven't noticed. :tiphat:

 

[alexfarms]

Some bailout!! The congress relents and gives the administration unprecedented control of the economy and the markets have done nothing but tank every since!! Go figure?

 

[RD-Sam]

The smart people knew it wouldn't work and would only put us further in debt, those are the ones that voted NO and stood their ground! :nod:

 

[bgm]

I think you might need a course in simple economics, do you have any idea what happens when people loose their jobs, their homes, their cars, all their possessions? It a simple trickle down affect, and unless you have some way to be immune from it, it will also affect you.

If you have the money set aside to sell off your culls and buy better at anywhere from double to ten fold the cost, more power to you. Glad you have the two year supply of hay too, at least you won't have to buy any in the near future to feed them, but what happens when that is gone and the beef market has died off because everybody is broke, does that still compute for you?

The sky may not be falling, but the market sure is, in case you haven't noticed. :tiphat:

I don't know what to say, all I can do is shake my head and laugh. I think you might need a course in simple biology, everyone has to eat. I just wasn't aware that the first thing everyone gave up when stocks went down was food.

I just know that this isn't the can do rural American spirit that I know. I also know that I will never allow myself to wallow in such dispair. I thank the lord that my world is much brighter than the one you describe.

I also know this is the last I'll say about this because I know I don't have the amibition to wade through the gloom and doom to try to change anyone's mind and I also know that you will not succeed in changing mine.

So in parting let me say, the future is what you make of it. Make something positive happen, or wait for something to happen to you.

Have a wonderful future, or not, which ever you are truly wishing for.

 

[1982vett]

Some bailout!! The congress relents and gives the administration unprecedented control of the economy and the markets have done nothing but tank every since!! Go figure?

The smart people knew it wouldn't work and would only put us further in debt, those are the ones that voted NO and stood their ground! :nod:

In his speech yesterday, Treasury Secretary Paulson said "Much attention has focused on the use of auctions to purchase troubled assets from financial institutions. We are moving as quickly as possible to organize and implement the most effective process possible. We expect it will be several weeks before our first purchase." http://www.treas.gov/press/releases/hp1189.htm Afterwards the market sold off some 400 points. As far as the selloff today; why wait several more weeks to see if anything gets done?

 

[grannysoo]

And when the market is falling, it is the time to buy and not sell.

So many get into the cattle business when the price is high, thinking about all the money they are going to make. When the prices go down, they get out thinking about all the money they are going to loose.

Ride the wave people...