The Effect of Emotion on Risk Decisions

Posted November 25th, 2011 — Filed in Bud's Musings

Lately it has been brought to my attention that Ann has shut down her commodity futures business because of the M-F Global bankruptcy.  This posting isn’t about Ann it is about what is happening and how we should react to things that happen in the business world.

Bankruptcies happen in every industry from time to time and it doesn’t mean the end of that particular industry, only the end of that business. There have been many ranch bankruptcies over the years and yet ranching has survived.  What this should cause us to do is not quit but just understand what should be done before we invest money or time in something we know little about.

There is risk in any business and the amount of money put in any high risk business should equal the knowledge that we have about that business. Any money that is put in high risk situations should be money the person can afford to lose.  People put money in high risk situations they know very little about and then complain if they lose money.

In a perfect world there would be no risk, but in the real world there is some risk in everything. Every industry has some people who do things that should not be done, legal or otherwise, this doesn’t mean that the rest of the industry should or will cease to exist.  Actually the M-F Global bankruptcy may be a good thing as now it will get rid of M-F Global and bring people’s attention to some of the thing that were happening and allow or cause some firms to watch things closer.  Out of every bad thing that happens there are good things that come from it.

I say these things even though Eunice and I had money in M-F Global and may or may not get all of it back. This was the risk we took and was money we could afford to lose or it would not have been there.  We will keep trading as the industry is as sound as any industry and will last longer than the people who are complaining about it.

Remember, high risk things have the potential of large profits or large losses.

Starting Out (more)

Posted August 9th, 2011 — Filed in Bud's Musings, Testimonials

In regards to the starting out post.

I am certainly considered a youngster at age 28 and while Cattle aren’t my only source of income I’ve been very blessed the last two years, largely in thanks to Bud and thinking about things in a world before cattle futures, FSA loans and disaster payments. I have no debt on either land (don’t own any) or cattle and this past year all my Cows were paid for out of retained earnings.

May I also recommend two books: “Knowledge Rich Ranching” and “Pasture Profits with Stocker Cattle.” Allan Nation, the author, is a smart man, he called Bud Williams a genius and the same can apply for Gordon Hazard, the man profile in the Pasture Profits book.

Cattle are amazing animals, a Cow can survive and raise a calf on pastures that other animals cannot utilize, the greatest advantage to someone is to therefore try and make this their unfair advantage. Field crop residue, so called waste land, seep land, CRP fields coming out of the program, these can all make excellent and very cheap Cow forage.

A young person could also try and partner with an older operator who has the money, land and resources but maybe not the energy or the desire to implement management practices. How much more productive can most pasture land be with grazing and animal management? How much money can a person nearing retirement age make on a bank CD versus what they can make loaning money or partnering with you? If you can prove your ability to work with cattle, especially weaning and starting calves I would think you would be a valuable commodity since almost no one anymore seems to want to do this or know how.

I actually think the barriers to entry in ranching/cattle are very low, there are lots of nice folks, few young people it seems and lots of resources available.

Starting Out

Posted August 7th, 2011 — Filed in Bud's Musings

Question: . . . I am a fan of following your website. I am going to ask a bold question and maybe you can or can’t answer it but in your opinion for someone wanting to start out ranching what is the best way to get started. I want to ranch so bad I can taste it but I keep running into road blocks. It seems so difficult with all the expenses. This is probably a bad question but I have to ask as you guys have been so successful in the cattle industry. Any advice is appreciated.

Answer:  Actually this is not a bad question, in fact there are very few bad question, there are many bad answers. One of the best ways to learn is by asking questions.  This will or should get you to the point where you know what questions to ask, then the learning can start.  Road blocks are only a state of mind, why can’t they just be learning experiences? Things that happen are just what they are not good not bad – just what they are.

“It seems so difficult with all the expenses” What are the expenses?  There are only expenses after we get into ranching and we have control of that. It is not possible to start many businesses with out there being some expenses.

With the e-mail I get no information just what you want and the perceived problems.  Getting into any business there will be some obstacles, that means that we must have a positive attitude about things and know or learn how to overcome or live with these obstacles. The most successful way to get into anything is to first learn what YOU know about it and what YOU can do that will make the business successful.  How much experience do you have, how much knowledge do you have about what you want to do?  It will be your knowledge that will allow this to work not all of the things that makes it difficult.

Most people think that to get into ranching they need lots of money and a place where they can make lots of money. It is usually wise to start with what you can afford and build on that. There are all kinds of opportunities to start small and work at whatever until the ranch operation is big enough to support you and what you would like to do.

The best way to answer your question is to say “Think positive, understand that the negative things are just something to learn how to overcome, then think big, with actions that are small.

Eunice’s 2-cents worth: Along this line, here is part of a letter that we just received from Grahame Rees,  the “R” in KLR Marketing who is teaching Bud’s marketing concepts in Australia.

“. . . . started with 4 head, borrowed $10,000.  18 months later has turned over 200 this year and paid back her $10,000.

. . . . started with 10 head 12 months ago no money down and has 100 head.
Plus to expand she applied to her agent to borrow $100,000 to expand.  He told her the money is interest free as she is making him more commission than he can bear.

. . .  told me he does not know of a beef breeder in Queensland that made money last year.”

Did you notice that both of these are women?  Do you suppose there is a difference in how young men and young women look at “Starting a Business?”

How well do we treat the things we eat?

Posted July 14th, 2011 — Filed in Bud's Musings

For many years we have been told how bad the animals that we eat are treated. They are kept in pens or fenced fields and all the things that are done to them. We are told that everyone should be vegetarians and this would stop all of the mistreatment of animals.   Which, like every other statement like this that is said or written with no thought to what they are saying, as there is a lot more to consider than someone’s personal agenda.

First thing, if no animals were killed for food what would happen to them? They would not just cease to exist and they would keep on increasing in numbers. Look at the wild horse herds that are being “protected.” There are some real problems and they are not living an idyllic and problem free life. Most ranch horses live a better and happier life.

This is not really about animals it is just something I saw that was in response to people eating animals and how cruel it was.

“Oh, have you seen how they treat carrots that are grown on these farms?
They are grown in dirty farm lots, yes real dirty, no shade or any kind of protection. They are force fed fertilizer (this could even be animal waste) that makes them grow even if they don’t like it. Then, just when they reach their teens, they are ripped out, not allowed to have a full and enjoyable life, and left to die in old wooden crates (not even new ones). Their fine root system slowly shrinks as they scream for water, but no one hears as they have no mouth and the sounds are muted, but their suffering is still there. Therefore, I will be their voice.

You Barbarians! “

It’s Important to LIKE your Animals

Posted September 16th, 2010 — Filed in Bud's Musings, Stockmanship

Emotion is it good or bad or does it really matter?

After many years of studying animals it is my belief that their emotions have a lot to do with their health and performance, good or bad. The last 20 years of working with and trying to teach people I’m now starting to believe that the emotions of the people working with animals may have more to do with the animal’s health and performance (good or bad) than the emotion of the animals. In most situations it is the emotions of the people that determines the emotions of the animals that they work.

Animals that we own and work are not naturally anything, they are what we train, teach or cause them to be. Animals or at least most animals can adjust to different situations quite quickly. They do have trouble adjusting to some emotional behaviors by the people working them, especially if this emotion keeps changing or is always negative. Animals are very perceptive and are very aware of changing or negative emotion in the people around them. When I was young most of the farmers in our area had some milk cows. If a stranger just walked into the milking barn during milking many of the cows would give less milk or at least hold up their milk and make them harder to milk. If the stranger was upset or a negative person the cows would sometimes get agitated and be hard to milk. This caused most farmers to keep strangers out of their milking barns just as a way to stop this problem.

Today, with most things done with machines or people in a hurry there is very little chance for the animals to adjust to anything that is consistent or close to the same each day. If animals are left alone they would live a very simple life. When we own them their life and the way they live is determined by us and there is very little that will be simple when people are involved. If we keep animals confused and upset all the time there will be health and performance problems.

The livestock industry keeps thinking that all of the problems can be cured with more drugs, machines and technology.  Like most things that cause a problem, these problems can’t be stopped with more of what causes it. While the industry will not change and be concerned about the emotion of the animals, the individuals who want to can be concerned and eliminate many of the health and performance problems.

 Learn to like all of your animals every minute of every day.  Any animals that you can’t like, get rid of them as soon as possible. The animals are virtually never the start of any problem,  the people who own or work them start the problem and then perpetuate it by being upset because the problem is there.

Enjoy your animals all the time and like what happens, good or bad (fix the bad then enjoy the good) or work with machines that are not as concerned about your emotions. You may notice that I stated that machines are not AS concerned, but even the machine will work better for the person that likes them MOST of the time.

Bud Agrees with Michener

Posted March 29th, 2010 — Filed in Bud's Musings

“The master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his information and his recreation, his life and his religion.  He hardly knows which is which.  He simply pursues his vision of excellence at whatever he does, leaving others to decide whether he is working or playing.  To him, he’s always doing both.”
                                                          J. Michener

This quote was on a business card given to us by a man who is planning on attending our Cheyenne Stockmanship School in May.  Since I have often heard Bud telling people much the same thing, I thought it would be a worthwhile posting in “Bud’s Musings.”

Knowledge Recession

Posted December 31st, 2009 — Filed in Bud's Musings

When I write something it always makes me wonder why anybody would read it and why  I wrote it in the first place. Then after reading what other people are writing it makes me even more confused about why anyone writes anything. Maybe it is like the person said “Isn’t it amazing that there is just enough news to fill the newspaper” as he noticed that every page was full.

What brought this on was  reading an article on the DTN (Minding Ag’s Business). Its title was “Buckle Your Seat Belts For 2010.” I’ll include some parts of the article so we can understand the thinking of people who are doing the writing. It starts out with “As the recession spreads through farm country, profits seem to be vaporizing. At these commodity prices, very few operations in either crops or livestock can project profits.” 

Then it goes on to explain how hard it will be to get credit or credit extensions. Then the solution that is given is to “Unlock the cash in your land as today’s interest rates will be the lowest in your lifetime.”  Why do we  think the solution to a problem is more of what caused the problem?  If there is no profit to be seen, why borrow on the (more…)

Expanding Your Business

Posted December 27th, 2009 — Filed in Bud's Musings

The dairy farmers are having problems just like a lot of people are now. At a meeting with the Justice Department’s antitrust division the issue was whether or not the largest players in the dairy industry were to blame.

It is always bad when businesses have problems but now, instead of realizing what actually caused the problem, there is the desire to blame someone else. Later in the article this is what they wrote.  “Dairy farmers nationwide are coping with historically low milk prices after a 36 percent drop in the past year to the lowest level in three decades. In 2007 and part of 2008, (more…)


Posted November 19th, 2009 — Filed in Bud's Musings

There are so many negative things that are brought to our attention every day that it is getting harder for anyone to stay calm and not be bothered by these things. Try to remember, for every negative there is probably a positive. We don’t have to ignore the negative but it does no good to let it keep us upset all the time. If a negative situation bothers you then work to  find a solution.

When you have something that is not working well, figure some way to solve the problem or eliminate it. It does no good to just complain and keep doing what doesn’t work. Many times the negative things are just different and only a problem if we don’t change what we are doing.

Hate and Happiness

Posted November 8th, 2009 — Filed in Bud's Musings

Are people forgetting how to be happy or have they already forgotten? There is all this talk about how bad things are. Nobody seems to realize that the homeless live better today than many people did during the 1930 to1940 period. During that time very few complained at all.  Now, very few stop complaining. During my life we have had a president every year.  Some were not very good and the others were worse, but they were elected by the people so they must have been what the people thought they wanted.

Seventy years ago about half of the people liked the president and about that many disliked the president. Things have changed, now about 50% like the president and the rest hate (more…)

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