The following editorial was published in Price Perceptions issue #1238 on March 22, 2003
After the War - Part I
This has been a terrible winter for most Americans...
Today, the war with Iraq is on everyones mind. We fear destruction of oilfields, use of chemical weapons, and terrorist retaliation against US cities. However, reports on the war have been positive to date. We could experience a groundswell of good emotions again...
... if the war were to end quickly with a minimum of bloodshed
... if US soldiers are seen helping Iraq citizens
... if the US immediately provides food and medical aid
... if world perceptions of America begin turning positive again
Americans would relax, go out to eat, have a spring barbecue and plan summer vacations. A resurgence of confidence would lift the cloud of gloom over many markets.
Markets are a reflection of human emotions. Not just greed and fear, but also negative and positive anticipation. Commodity markets have been in a state of depression in recent months... Rallies fail to carry through... Positive fundamental developments have been short lived... Nobody wants to own inventory... And, futures have traded at historic discounts to cash markets.
A positive war outcome could become the catalyst needed for emotional change in commodity markets. The stock market rebounded 3% since March 11 as emotions began shifting away from doom and gloom. The same emotional shift could bolster livestock, grains and soft commodities in the near future.
The following editorial was published in Price Perceptions issue #1239 on April 5, 2003
After the War - Part II
In the March 22 issue, we explained that a groundswell of positive emotions could be released as the war comes to an end in Iraq... We would celebrate and go out to eat... We would enjoy spring barbecues and plan vacations... And, a resurgence in confidence would lift the cloud of gloom over many markets.
In addition to a surge in emotional exuberance, the following forces will also contribute to near term economic prospects...
I was a corn buyer for a large milling firm in the early Sixties. It was a period of slow, steady growth punctuated by intermittent recessions. In those days, the corn market moved about 10 cents from seasonal high to low and futures traded in eighths of a cent. Fortunes werent made overnight in the stock market, commodities, or through rising home prices. Instead, fortunes were accumulated over a period of years through a meticulous series of small trades.
Some economists are forecasting economic gloom and doom for months and years ahead. Others are expecting a return of the miracle economy through new methods of quick wealth creation. Those who prosper in the future may find that it takes longer and requires more patience. One astute trader of the Sixties always said: There are only two ways to make a million dollars in trading. You can make it in one big trade that requires uncanny luck... Or, you can make a thousand dollars a thousand times. It looks like the slower, methodical way will become the wealth building process of the future.
TRADING IN COMMODITY FUTURES OR OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
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