We've been talking about the New Rules of Profitable Farming – and today's segment is on the importance of a plan. Uncertainty plus volatility means that your emotions go way up and your stress level could multiply ten times. Think about the importance of each decision you make to the viability of your operation, and then how fast the market moves. Stress!
Have you ever been in an elevator and had it stop? I have and it doesn't bother me because I am not claustrophobic. Some people, though, may come really close to being unglued in an elevator. Or how about being in a plane that just lost an engine? I've been on one of those too. I always laugh when the flight attendant goes through the emergency drill at the beginning "if we have a water landing…." If in fact we do have a water landing, people are going to injure each other trying to get out. They will be frantic. It's hard to stay calm when faced with an emergency situation.
My point: With uncertainty and volatility, emotions inevitably rise.
I have a friend that used to train firemen. He knows that all the training in the world could not prepare a first time fireman for that point in time when they hear their first alarm. He is quite sure their blood pressure increases by double and their IQ is mysteriously cut in half. He has witnessed them doing crazy things. They run around in circles… they don't get in the truck… they don't put their gear on, all because emotions rise under stress.
One must prepare because emotions get us every time. You need a plan.
Many people make good plans. The problem is we don't execute. I'm guilty of this at times. Even with the best intentions, you need accountability to execute. You simply cannot make good decisions when you are emotional.
In addition to emotion, there is research that shows mistakes make us vulnerable. You can be paralyzed by a mistake and the subsequent self-doubt renders you unable to make the next decision.
While it is true that there is a tendency to make more mistakes and chase money after you make a big one, the good news is we can learn from emotional times and mistakes. Emotion is human nature, regardless of our occupation, and affects every one of us at our core.
The best laid plan covers all possibilities. Make that plan and follow it.