Forum Archive Index - March 2004

["Woody" <solarmax@optusnet.com.au>]

Dave

 

I believe that you are an intelligent man, so without sounding condesending I would like to give you a lesson on life and on trading.

 

You most likely drink some sort of beverage, coffee, tea, mate, beer, marajuana juice what ever.. You are buying a commodity, you are trading in a commodity. You are affecting Supply and Demand.

    Now if I ended here you would most likely reply in your rather obfusative manner a retort pertaining to the fact that I am a professional trader in commodities and do not take posession of said item. That is correct HOWEVER!  I do perform a very valuable and very needed function.

 

Lets use my favourite grain as an example; Soybeans

The farmer produces soybeans and the commercial buyer buys them to manufacture his products, tofu, soy sauce, soy plastic etc. Now the farmer must obviously recieve enough for his crop to cover expences and to make a profit. The commercial buyer must buy the product at the cheapest price possible. The commercial buyer knows how much the primary producer needs to breakeven therefore he knows how much profit the producer is asking. So he bids at the lowest level possible so that with bid and ask fluctuation it eventually reaches a price that is amicable to both parties.

    Now all this is great in a perfect world. Where weather is right all the time, where bugs don't exist and where natural disasters do not occure.

 

Unfortunatly this is not the case, we live in a world of full of ' acts of God '. Farmers do and can lose a large percentage of their crop to these natural disasters. This then affects the Supply and Demand.  The farmer has less crop to sell but needs to get the same overall price  that was needed  when he had the whole crop intact to sell. The commercial buyer HAS to pay the higher price because he needs the product to sell to stay in business. Now what happens here is that the price reaches a level that cannot be afforded by the consumer, so the consumer ceases to purchase the product, this butterfly effect flutters along to the commercial buyer who is going broke in turn stops buying from the producer who then cannot afford to grow the crop, alas! no more soybeans.

 

Now along come Woody the saviour!!! da de da!@!!!!

 

In out frail but workable capitalistic world we have a means to avoid these Major problems with supply, demand and price. We have created the Futures Market. Here the farmer can forward sell his crop, effectivly getting paid before he even produces the beans. Now if the crop is a bumper the farmer can only recieve the locked in price that he purchased his contracts for. This can be good him as he knows his end profit beforehand. If on the other hand demand outstrips supply he does not take advantage of the higher prices now being asked.  The Commercial buyer can also Purchase the Crop at an agreed price in the Future but conversly cannot take advantage of possible lower prices in the future. So it is the Professional Trader that runs the Futures market without him and of course the amateurs there would be no market and there would be no commodities for sale in the world. So lamblast me all you will, be rude, condesending and abusive as you can but you would not enjoy a world without the professinal Trader of commodities.

 

Now you also had a major dig at my involvement in Forex trading.   Ignoratio elenchi

 

Do you purchase shares from other countries?

Do you purchase Shares in any Banks?

Do you have a Bank account?

Do you have a credit card?

Do you have a morgage?

Do you purchase goods from other countries?

Do travel overseas?

 

If it is yes to any of these questions then you also are a Forex Trader.Though miniscule at best.

 

Ignoti nulla cupido

 

The NZ Dollar is floated, Correct? What is it floated on? The Tasman sea?. Lake Blah Blah? What?

It is floated on the Sea of the Forex Exchange without this exchange currencies would collapse. We could all adopt a non floated currency, however importing and exporting goods and services would be at the mercy of the supplier.

 

Since you like Horace so much then I think you should take pen in hand and

 

'  Incudi reddere '

 

 

----- Original Message -----

From: David & Jill Stevenson

To: sharechat@sharechat.co.nz

Sent: Friday, March 19, 2004 6:23 AM

Subject: Re: Re: [sharechat] Mining and Forestry Stocks reply TA David

Reasons outlined rather than simply Horace`s quote , though a littlle more difficult, would lend credibility to your  rather bland statement.

 

                                   David

 

 

 

----- Original Message -----

From: Woody

To: sharechat@sharechat.co.nz

Sent: Thursday, March 18, 2004 11:12 PM

Subject: Re: Re: [sharechat] Mining and Forestry Stocks reply TA David

' credat judeaus Apella '

 

Woody

----- Original Message -----

From: David & Jill Stevenson

To: sharechat@sharechat.co.nz

Sent: Thursday, March 18, 2004 7:11 PM

Subject: Re: Re: [sharechat] Mining and Forestry Stocks reply TA

Just as in Law - Ignorantia juris haud excusat , Ignorance of the law is no excuse  . Similarly in ethics there is no convenient half way house . You are ethical or you are not . No good saying you do not know what are the ramifications as to the activities a company or investment  you choose  involves itself in.. You should make it your business to find out  .Of course there are limits to how far enquiry can proceed. This is the prescription for those who want to adopt a holier than thou position.

   Unfortunately pragmatism is the oil that lubricates how a burgeoning population  interacts and operates in an increasingly more and more complicated world. A world full of Mary Poppins` would grind to a halt..

   Lead balloon though the proposition is -  I see Forex speculation (there is no more sanitary word  for that activity)  as perhaps the most harmful activity . Don`t just blame the George Soros`for creating tidal waves  that can disrupt economies . It is the combined effect of individual speculators as well . Profiteering without a drop of sweat from the forehead .  One coral does not build an island but they each contribute to an outcome . I am no Mary Poppins but I could not deal in Forex as a speculator . Nor would I deal in property ( domestic that is ) speculating in that field you are playing around with the dreams of young couples aiming for a first house and  then family. No way !  At least with shares per se one is not dealing in necessities of life required  by others.  Futures traders in commodities could be argued as a  negative activity from a social point of view  as well. Where does the list end ?

 

      David Stevenson