The modern world developed from a society of subsistence farmers. The metaphors of nature, crops and orchards and seasons and livestock, have deeply rooted appeal. They remind us of a simpler time. But the metaphor in this story is personal history, not a fairy tale.
As a child I was privileged to visit the Omaha Stockyards from time to time in the company of a friend and his father, a “commission agent” who bought and sold cattle for farmer clients. Mr. G was a master of his work and he loved it. The stockyards were the largest in the world. The vast collection of pens and chutes and loading facilities were a temporary home each day to thousands of cattle, in transit from one place to another.
One might say the stockyards presented a rich tapestry for the senses. The fragrance of thousands of cattle in close quarters is one of those things that cannot adequately be described with pen and ink, or electrons.
Upon my introduction to this sensation, I first heard the words thought by some to be only a cliché. But they came from Mr. G, smiling broadly, breathing deeply, with a twinkle in his eye: “Smell that, son? That’s the smell of money!” For Mr. G and his colleagues and companions, the hundreds of workers at the yards and the customers they served, it was true. And there is value in this old tale to investors today.
As contrarian investors, we are mindful that the sentiment of the crowd is a contrary indicator. High levels of optimism may be associated with market drops ahead. Rotten sentiment sometimes points to future gains. When everyone expects the same thing, that expectation usually does not come to pass.
These days, the country seems to be in the grip of pessimism and foreboding. Sentiment about the future in general and the prospects for the markets in particular is poor by many measures. It stinks.
This too shall pass, sooner or later, and the mood of the country will improve. But for now, in the spirit of Mr. G we smile broadly, breathe deeply, and say “Smell that rotten sentiment? That’s the smell of money!”
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.