Freedom's Cost

Memorial Day is a time of remembrance that originated after the Civil War.  Mourning the soldiers lost in battle helps us to grasp the great cost paid to remain a free and independent nation.

I think too often we confuse freedom with safety.  Freedom is the ability to choose.  Safety is a feeling that we need not fear because we have surrendered the risk of danger to others.  It comes with a hidden danger, though.  It is the danger that those to whom we have surrendered will abuse that trust.  The nature of humans is such that those who seek control do so for their own gain and will use the power given to them for their own purposes.

I subscribe more to the philosophy of Patrick Henry who said, "Give me liberty or give me death."  Let me make my own decisions about what to believe and whom to trust.  Grant me the freedom to fail, to risk and to challenge those who would seek to block me from the pursuit of happiness in the way that I would choose.

I believe the best government is the least government.  Society needs agreed upon rules of order that protect citizens from abuse.  People do not need a "nanny state" that controls every aspect of their lives.  Happiness cannot exist in the absence of choice.

Some would argue that the government must protect those who society deems to be inferior or different.  My question is simply, who defines the inferior or different?  The innocent, the powerless and the incapable should certainly be protected.  That should primarily be the role of community, friends and family.  

Abuse of others should never be tolerated but it is not the role of government to define what is to be considered as abuse because by making that determination they create new forms of abuse.  There must always be mechanisms by which the citizens can quickly and easily correct that abuse.  Otherwise, the ultimate price will again be paid as was the case in the U.S. Civil War.

Life shouldn't be about safety and living under the dominion of abusive power.  It should be about choosing to face the challenges, to overcome the odds, to create and build, to love and to cherish those whom we would choose without the interference of abusive power.

On this Memorial Day let's remember the ideal that those who paid the ultimate price fought and died for.  Let's focus on freedom.  That includes the freedom to be wrong, to make mistakes and to fail.

The Black-eyed Susan (Rudbeckia hirta) is one of my favorite flowers of summer.  They were not native to the area where I grew up but are common where I now live.  Their blooming is a sure sign that Summer is near.  The one pictured below is wild although many times they are found in cultivated beds, safely tended by their masters.  I prefer the wild and free ones who blossom where they choose.

Market Psychology

This evening I was visiting with a friend of mine who is a commodities buyer for a very large feed company. He commented about how crazy the market was today. So, I asked him what he was talking about. He said, "corn futures jumped 16 cents on the news that it froze in Missouri. The crazy thing is, they haven't even planted corn in Missouri yet! What could it freeze out?"

The futures market is a very psychologically driven market. It has happened numerous times with cattle futures based on rumors of BSE or some other disease being found. It makes no logical sense to someone in the cattle business. It shows the influence of speculative traders that buy and sell based on psychological factors, not on reality.

The same thing happens in the stock market. Stocks that are totally unrelated to newsworthy events about a business, or industry, are often impacted as much or more than stocks that should directly be effected by a particular news item. It makes sense when the stock of a chip maker falls because its biggest customer is struggling with sales. It doesn't make sense when the entire lending industry is impacted adversely by news that a particular sub-prime lender is heading toward bankruptcy.

It is the individual who understands "mob" psychology that will often do well in the stock market -- at least in the short run. I personally believe that such market gyrations should be ignored and investment should be based on business value, sound management and a strong plan. Time should be taken to understand an industry and the factors that affect it before putting money into it. Gambling based on "gut feeling" is a sure way to lose. That "gut feeling" is often indigestion caused by worrying about an investment that had no real merit in the first place.

Futures markets are a tool for protecting the price of a commodity that one owns, or plans to own in the course of their business. When used properly, they can be a form of insurance against cash price moves based on real-world events. The stock market is a place to invest in well-managed companies that need additional capital to expand. It is a place that requires a long-term view for success. It isn't a place to ride the capricious price swings of a psychologically driven market in the hopes of a windfall. In that environment, only the professionals win.

The markets have always intrigued me. I guess it is part of the same thinking that caused me to major in Agricultural Economics in college. On the micro, or firm level, economics is just a way to evaluate decisions on how to best utilize the resources that you have at hand. On the macro, or system-wide level, economics is frequently heavily influenced by psychological factors. What drives consumer decision making? Are they always rational in their choices? Do businesses always make wise decisions? -- and on and on. The people side of it often creates the greatest uncertainty. Maybe that's why we hear so much about Consumer Confidence Levels and similar measures of people's attitudes about the economy.

I've always enjoyed watching people and puzzling over why they do the things they do. I don't think I'll ever figure it out though. If I did, I'd be wealthy from playing the games in the stock market.