If you spend any time observing someone who has mastered a pursuit, you’ll notice that while their output is amazing, the input is where the mastery truly shows.
- A musician playing a complicated piece while their hands seem to barely move.
- An athlete blowing by an opponent with a simple spin move.
- A fisherman putting a lure right up next to a dock with a barely noticeable flick of the wrist.
These masters (and I’m sure you can think of many more examples) have learned how to get maximum output with minimal input. A typical pattern of learning how to do something is that when you start, you do a few simple things because that’s all you know how to do. As you progress, it’s common to start doing too much – trying to use everything you know in every situation, often throwing in things where they don’t belong, and just generally overdoing it.
As you build skills, you end up back where you started – doing just a few things but in a very efficient and effective way. Simplicity and mastery go hand in hand.
How does this concept fit into trading grain? Just like it fits into everything else.
Highly skilled basis traders have the same tendencies as those highly skilled in anything else: They tend to approach things very simply.
- What are spread structure and basis asking me to do?
- What are the grain quality, logistical, and financial constraints of my business?
- How do I provide value to those I buy from and those I sell to?
- How do I take action to lock in buy and sell basis (and the spreads that connect them)?
Highly skilled individuals realize that doing less is often the most sophisticated approach and distilling a complex scenario into the fewest actions possible then executing those with discipline and efficiency is the path to sustained success.
Philip Luce is chief executive officer of White Commercial Corp., Stuart, FL; Kansas City, MO; phil@whitecommercial.com; @philwcc.