Don’t let the title spook you.  This is simply a tale about a wealthy grain speculator who, as the story goes, raised his three children after his wife died.  Much to his dismay and despite his best efforts, however, they were becoming lazy and wasteful. Determined not to see his hard-earned money go to waste, the speculator bequeathed his money to charity.  As for the children, they were promised they would obtain the secret to his success in trading after his death.  So when the time came, they eagerly opened up his safe, expecting to find volumes of manuals and formulas.  What they found instead was a small piece of paper, with the following written instructions:

Buy corn in October, January, May and August.

Sell corn in December, April, June and September.

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You should have guessed by now that this is an old traders’ story, passed down from generation to generation of commodities traders.  Whether it is true or not is irrelevant, as the wisdom from these two simple phrases have been used as rules of thumb in the buying and selling of wheat.  The more complete version has advice for wheat as well as corn:

January 10 – Sell March wheat

February 22 – Buy May wheat

May 10 – Sell July wheat

July 1 – Buy September wheat

September 10 – Sell December wheat

November 28 – Buy March wheat

A few trading gurus swear by this as a simple way to keep track of the cycle of buying and selling grains.  For obvious reasons, I’m not going to officially endorse this ditty as investment advice: If you have a lot of playing money, a strong stomach, and balls the size of wrecking balls, then have at it, but don’t say I didn’t warn you.  What fascinates me more is how a few simple words could make a world of difference in trading.  We can only hope that the speculator’s hapless kids finally got off their asses and used those few words to good effect.

Here’s another story that comes to mind, one of Aesop’s lesser-known fables:

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A Farmer being on the point of death, wished to insure from his sons the same attention to his farm as he had himself given it. He called them to his bedside, and said: “My sons, there is a great treasure hid in one of my vineyards.” The sons, after his death, took their spades and mattocks, and carefully dug over every portion of their land. They found no treasure, but the vines repaid their labor by an extraordinary and superabundant crop.

There’s a lesson to be learned in both stories, and it has been in the back of my mind. You should be thinking about it, too.   For people in my generation (Generation X), we’re already wading through the crap that the past generation (Baby-Boomers) so lovingly left us in their infinitely short-sighted wisdom. There’s not much we can do about it, except dig ourselves out and then rebuild our wealth. Whatever rewards we bring, we will have truly deserved them.  What concerns me, and should worry all of you who read this, is whether the next generation (Generation Y) will learn from the mistakes that we have made. I don’t think I exaggerate when I say that this new generation had a lot more of a sense of entitlement than we did.  But who am I to say this? After all, there was a spell of economic prosperity for a long time, and we enjoyed a lot of things our World-War II-era forefathers and mothers never had. That’s even with the few recessions that hit us.

Now we are relearning those hard-earned lessons that our grandmothers and grandfathers learned in the Depression.  When we have gotten ourselves out of this hole, hopefully we will be able to pass them on to our descendants.  For history must not have to repeat itself, as long as we do our part in making certain it is taught properly.  Furthermore, if we prepare the next generation for an uncertain future – which can be as rewarding as it is risky – we will ensure that when the right opportunities come, our children will not look foolish (as Earl Nightingale says about one who is unprepared) but look every bit the proud successors to us, as stewards of the Earth.

Copyright Anabasius 2009

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