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Post by MoBuckChaser on Feb 1, 2018 15:18:22 GMT -6
My Banker Buddy offered me 5.25% on a 5 year CD instead of throwing my money in more land. Not bad.....Not good. What are you guys seeing for fixed income with only locking it up for 5 years?
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Post by Freeborn on Feb 1, 2018 15:20:34 GMT -6
Anyone have Berkshire Hathaway? That seems to beat the S&P every year. My inlaws have one share. My father-inlaw purchased it just so he could get on the mailer.
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Post by sd51555 on Feb 1, 2018 15:24:45 GMT -6
My Banker Buddy offered me 5.25% on a 5 year CD instead of throwing my money in more land. Not bad.....Not good. What are you guys seeing for fixed income with only locking it up for 5 years? All the media money is on rates going up from here forward. Fed seems itchy to throw some cold water on cheap money. I haven't looked at CDs in years, but 5.25% seems about 4.25% higher than anything I've seen in the last ten years.
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Post by MoBuckChaser on Feb 1, 2018 15:27:55 GMT -6
My Banker Buddy offered me 5.25% on a 5 year CD instead of throwing my money in more land. Not bad.....Not good. What are you guys seeing for fixed income with only locking it up for 5 years? All the media money is on rates going up from here forward. Fed seems itchy to throw some cold water on cheap money. I haven't looked at CDs in years, but 5.25% seems about 4.25% higher than anything I've seen in the last ten years. Many farmers here with a debt to asset ration greater than 50% are now paying 7.5% or more to borrow input money. So the screwing begins!
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Post by sd51555 on Feb 1, 2018 15:50:15 GMT -6
Foggy, you owe me 6%.
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Post by chummer16 on Feb 1, 2018 18:04:52 GMT -6
Foggy, you owe me 6%. You better check after hours trading. You will get it all back tomorrow plus some. It is trending on Facebook.
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Post by Foggy on Feb 1, 2018 18:58:07 GMT -6
I dont owe you squat SD. Your results may vary! My shares sold PRIOR to the 4.5 % loss today......and your talking after-hours trading which is pure sentimental buying and selling. The average guy doesn't bother to look at those markets very often.....they are busy sipping cocktails by then and looking forward.....not backward. .
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Post by chummer16 on Feb 1, 2018 19:35:34 GMT -6
My bad you posted after hours hype.
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Post by sd51555 on Feb 1, 2018 21:11:41 GMT -6
I dont owe you squat SD. Your results may vary! My shares sold PRIOR to the 4.5 % loss today......and your talking after-hours trading which is pure sentimental buying and selling. The average guy doesn't bother to look at those markets very often.....they are busy sipping cocktails by then and looking forward.....not backward. . I accept your apology. In all honesty, I had been thinking about it for a while. I didn't sell much, but I've been looking for a place to pull off a little more cash where I can. Google might slide some tomorrow, their numbers weren't as good. Both of those companies are due for an evolution, Amazon towards making a profit, and Google sitting on nearly a hundred billion in cash. They're due for an Apple-type uprising sitting on a pile like that.
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Post by sd51555 on Feb 1, 2018 22:33:23 GMT -6
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Post by Freeborn on Feb 2, 2018 5:33:59 GMT -6
All the media money is on rates going up from here forward. Fed seems itchy to throw some cold water on cheap money. I haven't looked at CDs in years, but 5.25% seems about 4.25% higher than anything I've seen in the last ten years. Many farmers here with a debt to asset ration greater than 50% are now paying 7.5% or more to borrow input money. So the screwing begins! Is that an operating ratio or does that include land and buildings? If that includes everything how did they get so in debt? Land purchases or machinery? Mo, you run allot of older equipment don't you, seems that's a better model particularly on smaller farmers.
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Post by Freeborn on Feb 2, 2018 5:40:51 GMT -6
I hope it's not that high, I would prefer slow and steady so it's a little more predictable and not with allot of ups and downs.
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Post by MoBuckChaser on Feb 2, 2018 8:10:10 GMT -6
Many farmers here with a debt to asset ration greater than 50% are now paying 7.5% or more to borrow input money. So the screwing begins! Is that an operating ratio or does that include land and buildings? If that includes everything how did they get so in debt? Land purchases or machinery? Mo, you run allot of older equipment don't you, seems that's a better model particularly on smaller farmers. First of all, using me as a comparison doesn't work. I don't really farm to make a living. So my running old equipment kind of skews things. Most farmers get into the bad habit of inflating their financial statements. The farm financial statement that the bank loans off of includes short term debt, (operating money for planting including seed, fertilizer, herbicide, fuel, credit card debt, health care, things used in one year). Then it has mid term type debt, (equipment loans, leases, cattle purchases, grain bins site building, pickup trucks, things paid for from 2-10 years). Then long term debt would be your building site, home and land purchases. Then they allow the farmer to put a value on everything to create the asset part of the financial statement. That is when farmers get in trouble, They over estimate cattle, grain, hay in storage land and buildings, and the current value of those items. Then it starts to snowball on many farmers as the ratio's invert. That is when the bank starts charging you more and more interest further compounding the farmers problem. Yes used equipment would help, but you need so much of it, it still adds up with everything else, all while farm commodity prices are at break even income at best currently. So higher and higher interest rates will be coming as farmers debt increases and income decreases making the farmer a bigger risk to loan to each year.
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Post by Freeborn on Feb 2, 2018 9:26:31 GMT -6
Is that an operating ratio or does that include land and buildings? If that includes everything how did they get so in debt? Land purchases or machinery? Mo, you run allot of older equipment don't you, seems that's a better model particularly on smaller farmers. First of all, using me as a comparison doesn't work. I don't really farm to make a living. So my running old equipment kind of skews things. Most farmers get into the bad habit of inflating their financial statements. The farm financial statement that the bank loans off of includes short term debt, (operating money for planting including seed, fertilizer, herbicide, fuel, credit card debt, health care, things used in one year). Then it has mid term type debt, (equipment loans, leases, cattle purchases, grain bins site building, pickup trucks, things paid for from 2-10 years). Then long term debt would be your building site, home and land purchases. Then they allow the farmer to put a value on everything to create the asset part of the financial statement. That is when farmers get in trouble, They over estimate cattle, grain, hay in storage land and buildings, and the current value of those items. Then it starts to snowball on many farmers as the ratio's invert. That is when the bank starts charging you more and more interest further compounding the farmers problem. Yes used equipment would help, but you need so much of it, it still adds up with everything else, all while farm commodity prices are at break even income at best currently. So higher and higher interest rates will be coming as farmers debt increases and income decreases making the farmer a bigger risk to loan to each year. That clears things up, estimating the current value of assets particularly ones that need to be converted to cash is not an easy thing to do. I could see people falling into that trap and I imagine the banks are all to willing to let them do it. With your livelihood and family on the line it would make sense to be conservative.
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Post by MoBuckChaser on Feb 2, 2018 9:47:00 GMT -6
First of all, using me as a comparison doesn't work. I don't really farm to make a living. So my running old equipment kind of skews things. Most farmers get into the bad habit of inflating their financial statements. The farm financial statement that the bank loans off of includes short term debt, (operating money for planting including seed, fertilizer, herbicide, fuel, credit card debt, health care, things used in one year). Then it has mid term type debt, (equipment loans, leases, cattle purchases, grain bins site building, pickup trucks, things paid for from 2-10 years). Then long term debt would be your building site, home and land purchases. Then they allow the farmer to put a value on everything to create the asset part of the financial statement. That is when farmers get in trouble, They over estimate cattle, grain, hay in storage land and buildings, and the current value of those items. Then it starts to snowball on many farmers as the ratio's invert. That is when the bank starts charging you more and more interest further compounding the farmers problem. Yes used equipment would help, but you need so much of it, it still adds up with everything else, all while farm commodity prices are at break even income at best currently. So higher and higher interest rates will be coming as farmers debt increases and income decreases making the farmer a bigger risk to loan to each year. That clears things up, estimating the current value of assets particularly ones that need to be converted to cash is not an easy thing to do. I could see people falling into that trap and I imagine the banks are all to willing to let them do it. With your livelihood and family on the line it would make sense to be conservative. It is a fine line for farmers or any business owner to be aggressive enough to make money and get ahead, or be so conservative you can't pay all your loans back. Some have common sense on when to expand, some do it for the wrong reason at the wrong time, and it bites them in the ass. Banks are in business to loan money, not talk you out of borrowing. So that does not help the situation for some guys either.
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