When I first started learning about futures, I was overwhelmed. If you made it through the article on options then learning about futures should be a cake walk. But just in case, I’m going to break this up into 3 parts.
Do you remember Little House on the Prairie? I don’t know if you’ve ever read the books by Laura Ingalls Wilder about her life when her family moved west, but it’s a must for nostalgia’s sake. (I mean, who do you know today that makes their own clothing, churns their own butter, and takes their lunch to school in a bucket?)
Times are Good
I used to watch the TV episodes with my mom when I was little. I remember an episode when Pa had a great crop and the family was really happy; they were going to have lots of money once he sold the crop. They were planning on buying new shoes for the kids; Ma was going to get some new material for a new Sunday dress; and I think Pa was even planning to get a new fiddle. They were really about to live it up!
And Then the Bottom Drops Out
The next thing you know, it starts to hail the night before Pa is supposed to harvest this bumper crop. Everything is ruined! No crops to sell, no new shoes, no new dress and no new fiddle!
The Moral of the Story
For those of you who like happy endings, at the end of the episode Pa goes off to find work along with the other men of the town. The women of the town thresh what they can of the destroyed wheat and everyone comes together. We laugh we cry, we learn to join together in a crisis, yada yada yada.
How This Relates to the Futures Market
If Pa had known about the futures market he could have made money selling a futures contract at the market price before the harvest and his two daughters wouldn’t have to walk to school barefooted. In Part 2 we’ll take a look at why.
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14 comments
7 pings
MoneyCone says:
January 5, 2012 at 10:34 am (UTC -4 )
Sound like the story of our dotcom era! Back then I had no idea 10 years down the line things would be so different!
Should’ve jumped on those 7% CDs!
LaTisha Styles says:
January 8, 2012 at 2:10 pm (UTC -4 )
Exactly! It always seems to come out of no where.
Jai Catalano says:
January 5, 2012 at 10:52 am (UTC -4 )
Thanks for holding my hand on understanding futures. It makes life a lot easier here on the prairie.
LaTisha Styles says:
January 8, 2012 at 2:11 pm (UTC -4 )
lol! Everything was always easier on the prairie
Jackie says:
January 5, 2012 at 1:38 pm (UTC -4 )
Love the story. Did Pa use it as an opportunity to say “Don’t count your chickens before they hatch?” too?
Hunter - Financially Consumed says:
January 5, 2012 at 2:48 pm (UTC -4 )
I hope Pa learned not to keep all his eggs in one basket! Sorry, couldn’t let that one go.
LaTisha Styles says:
January 8, 2012 at 2:11 pm (UTC -4 )
I’m sure he did! He always had a lesson in every episode. And then he would play his fiddle and everyone would dance lol
SB @ One Cent At A Time says:
January 6, 2012 at 8:07 am (UTC -4 )
Many learning in this story. I also wrote about commodity trading in the past. I tend to agree with you, a little knowledge on the market van keep you out of trouble most of the times.
LaTisha Styles says:
January 8, 2012 at 2:12 pm (UTC -4 )
Yeah, if you can learn the basics, you have a good starting point.
Pam at MoneyTrail says:
January 7, 2012 at 8:19 pm (UTC -4 )
Love the Little House on the Prairie series. There are a lot of money concepts embedded in those classic stories. I actually wrote about it in http://blog.moneytrail.net/2011/09/childrens-book-reviews-using-classic.html
LaTisha Styles says:
January 8, 2012 at 2:12 pm (UTC -4 )
It was one of my favorite series to read!
Little House says:
January 7, 2012 at 8:25 pm (UTC -4 )
I think this goes along with the saying, “Don’t count your chickens before they hatch.” I used to love watching Little House on the Prairie. *sigh*
Little House says:
January 7, 2012 at 8:26 pm (UTC -4 )
I didn’t see Jackie’s comment. Great minds think alike!
LaTisha Styles says:
January 8, 2012 at 2:14 pm (UTC -4 )
lol! YES!
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