The Klarenbach Report Sep 19

We live in a world of binary thinking.

Where there are two sides, and you can only pick one.

Are you with me or against me?

We attach labels with certainty.

Black. White.

Capitalist. Socialist.

Left. Right.

Conservative. Socialist.

Bullish. Bearish.

When I was younger, my conviction was stronger.

About most things. Maybe everything…

There were rights, and there were wrongs.

I was adept at supporting my biases.

My conviction about most topics has changed over time.

A developing awareness that I live in a dynamic world, with a constant stream of new information to process, reduces my conviction. Things change. My opinion changes.

Asking the questions, “What don’t I know?” and “What are the weaknesses in my thesis?” is powerful.

I no longer get married to my beliefs.

The older I get, the less I know.

As William Goldman wrote about the motion picture industry:

“Nobody knows anything ... Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess and, if you’re lucky, an educated one.”

We can apply the same thesis to grain marketing.

Growers and buyers with Long positions tend to believe that the prices are going higher.

Short position holders tend to believe that the price will move lower.

Sometimes the market is trending up or down, increasing our conviction that that trend continues.

Other times, the market moves sideways, displaying the trend’s uncertainty as the buyers and sellers battle for control.

Humans crave certainty.

We seek out binary answers.

If the price going up?

Is the price going down?

Most times, the battle between the buyers and sellers is not providing a high-probability, low-risk answer.

The accompanying price chart is an example of this.

I need the price to get above 51 to become Bullish.

A new low below 45 makes me Bearish.

Between 45 and 51?

I Don’t Know.

Saying I Don’t Know is a strength, not a weakness.

It is a superpower.