Learning from the Markets

by John DePutter, Feb 29th, 2012
 
I first started studying commodity markets when I was 24 years old. One reason I’ve stayed involved with them – and stayed keenly interested in them – is that I’m always learning something new. Something new about the world, about human nature, about myself. Something new about my business, the process of the job, the clients we serve.

Here are some of things I’ve learned as a perpetual student of the markets.

The world
Whether you’re a farmer deciding whether to sell your soybean crop today or next week; whether you’re working for a company that buys grain or sells products that contain grain; whether you’re someone who wishes to take control of your own investments… it helps to be aware of what’s happening around the world. The weather in Russia or Brazil can affect the prices that matter to you. The economic situation in China can have an impact. The flow of big fund money in or out of the Euro or the US dollar, or the latest rally in crude oil prices, all these things are worthy of some attention. I find that my attention to world affairs has helped keep me engaged and interested in the world around me.

Human nature
The markets respond to more than just fundamental forces such as weather shifts or geopolitical events. The markets respond to various human responses and emotions. That’s why I’m always learning something new about human nature. There are some aspects about human nature that never change. As many of my colleagues in the business would agree, market action is ruled by such things as greed, fear and wishful thinking. This aspect of the markets is fascinating and it has given me a perspective that has added a dimension to my business and personal life that I would not have had without a long career of involvement in markets.

Business
I have seen many small businesses fail. I have often said that in any business, your weakest link will kill you. Many times I’ve seen people with the right product, the right production line-up, the right people… but there may be one missing link they don’t have and it can be a blind spot for them.

On some farms, marketing is the weakest link. In some agricultural businesses, risk management is the weakest link. One of my goals is to provide information and advice and coaching and knowledge growth that helps people ensure that this aspect of their business is not their weakest link – or if it is their weakest link to help them strengthen it.

Dealing with the markets requires, in part, a process – a set of rules to guide your behaviour with respect to the decision making process. At the DePutter Offices, our approach is partly about a process that involves checking key factors and indicators. People who work here understand that part of the business and the job description is about process. The process is always changing. What’s important to realize is that there it is best to have a process to help keep you on track.

Myself
Why and how do I keep learning something new about myself? Well, in the world of markets you are never really finished the job. The markets are always there. It’s an ongoing journey of analysis and discovery and as you go, you can’t help but be introspective and reflective.

You learn from your mistakes – you have to or you can’t stay in the business. I still sometimes lose my nerve during downtrends and make emotional decisions, and I still sometimes get overly bullish when a market is on the way up. I’m not perfect. But in the world of markets, if you make a mistake you cannot delude yourself. You cannot pretend you are right and the market is wrong. If you made a bad call or lost money or recommended a sale at the bottom, then you blew it, pure and simple. And every time that happens, you have the opportunity to learn something about yourself and grow from it.

Together all of these things have helped me to foster my own curiosity, openness to learning, and intrigue for new perspectives. For me, working with the markets is a dynamic, engaging, daily process. One that has shaped not only my business, but also to some extent my life and the way I see the world.

PS – It helps to work with people that feel the same way, too. I’m always looking to meet potential candidates so if this post speaks to you, feel welcome to email me at jdeputter@agalert.ca !