Sterling Terrell

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In Business, Don’t Hire Close Friends and Family

In Business, Don’t Hire Close Friends and Family

[This is part of the series: 7 Tips To Make You Better At Business]

Another mistake that businesses should avoid like the plague is hiring the wrong person.

They say the hardest part of business is hiring – and keeping good people.

Whoever said that first was right-on.

A strategic mistake that so many people make in this is to hire a friend or family member.

I can, however, understand the rationale behind it.

“Why hire a stranger when cousin/brother-in-law Joe / Betty is looking for a new job or is going through a “transition”?  I mean, Joe was always a good guy. He used to run his own company before he moved on to something else. At least Betty is family – I know I can trust her.”

I submit – business and family (or business and friends) do not mix.  Priorities in one relationship are simply, more times than not, priorities in the other.

The tragic example I have seen play-out is the hiring of a close family member.

The family member – let’s call her Jane – lost her small business to bankruptcy and got into a bit of financial trouble.  Jane was then asked to come work for the company that her brother did business at and invested in as a large passive owner.

In no time at all, Jane was named President of the company.

Then, competition got tighter, margins got smaller, and the company began to bleed red.

In this, Jane thought the answer was that the company needed to grow its way out of financial trouble.

On dwindling profits, Jane opened a new branch office, hired additional staff, spent more on advertising a non-retail business, and used the company credit card liberally to entice customers (in an extremely sticky business).

In short, she did everything wrong.

You don’t hire family or close friends because in the midst of this train wreck – Jane’s brother is not letting business be business.

He is weighing his monetary investment by how much letting Jane go would hurt his relationship with his sister, or his wife, or his nieces and nephews, or his parents, or maybe even his potential inheritance.

You don’t hire family or close friends because if who you hire is incompetent, lazy, or stupid, you want the ability to easily fire them.

Try firing a family member. Life at home will never be the same again.

You don’t hire family or close friends because the whole thing is not worth it.

Let business be business – and let family and friends be family and friends.

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Filed Under: PotpourriTagged With: #Business, #Family

The Cotton Club Letter – For Week Ending 5/29/2015

The Cotton Club Letter – For Week Ending 5/29/2015
 
Price Picture
 
 
Chart Source:  barchart.com


Trend Picture


Chart Source:  barchart.com
 
Notes
Nearby contract closed around 90 points higher this week.
Managed money is net long. 
Short-term, technical traders see possible support around 62.50, possible resistance around 66.00.  
The trend is down.
 
Price 
July-15 is at:  64.35      Volume = 36,712
Oct-15 is at:  65.30       Volume =  17
Dec-15 is at:  64.64     Volume = 21,139
Cotlook ‘A’ Index is at:  71.05
 
Cash Sales
Most recently, the trading platform TheSeam.com reported an average cash price of approximately: 59.97.
On July, that puts the average basis at approximately:  –438 points.
Cash prices are averaging approximately 11.07 cents over loan value.

Stocks and Sales

ICE Certified Cotton Stocks = 124,606              
US Net Upland Export Sales = 117,500        
(Vietnam was the big buyer at 40,700.)

Current World Balance Sheet (2015/2016)
Beginning Stocks:  110.25  (million 480 lb. bales)
Production:  111.25
Supply:  221.5
Mill Use:  115.29
Ending Stocks:  106.29
Ending Stocks/Mill Use Ratio:  92.19%

Current China Balance Sheet (
2015/2016)

Beginning Stocks:  65.33 (million 480 lb. bales)
Production:  27.00
Imports – Exports:  5.95
Supply:  98.28
Mill Use:  36.00
Ending Stocks:  62.28
Ending Stocks/Mill Use Ratio:  173.00%

Current India Balance Sheet (
2015/2016)

Beginning Stocks:  14.32 (million 480 lb. bales)
Production: 29.50
Imports – Exports:  –4.1
Supply:  39.72
Mill Use:  25.75
Ending Stocks:  13.97

Ending Stocks/Mill Use Ratio:  54.25%

 
Current USA Balance Sheet (2015/2016) 
Beginning Stocks:  4.4 (million 480 lb. bales)
Production:  14.50
Imports – Exports:  -10.69
Supply: 8.21
Mill Use:  3.80
Ending Stocks:  4.4
Ending Stocks/Mill Use Ratio:  115.79%

 
Commitments of Traders 
Producer / Merchant
  • Long:  10,610  (Contracts)
  • Short: 106,753
Swap Dealers

  • Long:  59,531
  • Short: 4,501
Managed Money

  • Long: 58,762
  • Short:  34,703
Other Reportables

  • Long: 23,319
  • Short: 11,435
 

May Cotton Price Model:  55.4 cents 
A regression model, like the one located here can give insight into how prices, on average, would react given a change in one or more fundamental supply or demand factors.  A proper interpretation of this price model would be:

 
“Over the last number of years, if cotton supply and demand were at their current levels, we would – on average –  expect the US price of cotton to be approximately:  55.4 cents.”

(*Note:  This model does not attempt to forecast the future direction or level of cotton prices.)
 

General View 
Bearish.

(Keep in mind that while this is a weekly letter, I can easily change my mind in 24 hours.)

This letter archive can be found by clicking, here.
 
If this email was forwarded to you and you’d like to sign up, email me at sterlingterrell@hotmail.com with “Cotton Club” in the subject line.  Email with “Stop Cotton” in the subject line to be removed.

*This is for informational purposes only, and not a recommendation to buy or sell.
There is substantial risk of loss to futures and options trading. 
Past performance may not be indicative of future results. 
One should carefully consider their financial suitability prior to trading futures or options.

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Filed Under: Not BooksTagged With: #TheCottonClubLetter

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