AgTalk Home
AgTalk Home
Search Forums | Classifieds (7) | Skins | Language
You are logged in as a guest. ( logon | register )

Creation of working capital
View previous thread :: View next thread
   Forums List -> Market TalkMessage format
 
jdironman
Posted 9/26/2021 09:39 (#9239157 - in reply to #9237963)
Subject: RE: Creation of working capital


Nw Iowa
I am old enough to hear my grandpa tell about one and I lived thru the second. Rules change real fast in those times. We now have another generation that hasn’t experienced this. I think it will probably cycle one more time before I leave this earth but government is so unstable and unpredictable that skews it even more, don’t know which way. My dad who is in mid 80’s has always said there are three types of guys when hard times hit. First one has everything paid for so he has a lot of opportunity, ( pretty small percentage) next is guy with everything 1/2 paid for. Than there is guy leveraged up to gills. Dad said I either want to be the first or third. The 1/2 paid for one is last choice. His reasoning ( and I seen it in the 80’s) was that guy with everything 1/2 paid for was easiest for banker to foreclose on and come out whole. The real wild bastard that didn’t have any equity, bank didn’t want to foreclose because it was too big of loss. Here in the 80’s that is exactly what happened, our land went crazier that just about anywhere in the Midwest ( 4000 plus in early 80’s to a low of 700-800) and and the highly mortgaged guy that was still working survived it much better than the 1/2 mortgaged guy. Wasn’t fair but what happened. Of course the highly leveraged guy that gave up didn’t survive either. This is not advice to mortgage yourself to max or anything like that but to all just be careful what your situation will look like if we have another 80’s type deal. I applaud you for thinking ahead and if you have a financial person you trust I would sit down and see what options give you best way to lock in cheaper longer term working capital. Much smarter to do it now when everybody wants to borrow money that when nobody wants to borrow money. A year and half ago it looked like we were on a verge of a bunch of guys getting out. Now we have injected all kinds of money into ag and everybody feeling pretty heady but what we have really done is raise the ante. Everybody is going out and spending more money, Creating more debt because interest is cheap and god for bid we may pay more taxes. Neal Harl , a Iowa ag economics professor who was well respected in his time said that the reason people get in trouble in bad times is decisions they make in good times. That has always stuck with me.
Top of the page Bottom of the page


Jump to forum :
Search this forum
Printer friendly version
E-mail a link to this thread

(Delete cookies)