trip·wire (trIn most prepper circles, the word tripwire is used to indicate an event which has occurred, which then results in some sort of response by the prepper. A very simple example would be you losing your job (the event) results in you cutting back on your expenses (the response).p
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1. A wire stretched near ground level to trip or ensnare an enemy.2. A wire or line that activates a weapon, trap, or camera, for example, when pulled.3. A small military force whose involvement in hostilities will trigger the use of a larger force.
If you're really "on your game," you establish tripwires well enough in advance of an event having a negative impact on your life. Using the example above, you might have set a tripwire whereby you watch your company's financial health. If they were to post losses two quarters in a row, you might start looking for another job in anticipation of being laid off in the future.
The data sources being used are all-important. The acronym GIGO - Garbage In, Garbage Out - says it all. If your information is bad, your decisions will be bad.
Your interpretation of that data is key as well. If you mis-interpret the information, your actions may be for naught. The more time you put into interpreting the data, the more likely you are to come up with positive results. Again using the earlier example, your company might be posting losses because they are making significant investments in equipment and personnel as they prepare for a major expansion.
So, what do you set up tripwires to watch? Whatever you're concerned with.
For some people, it might be personal financial. For others, it might be broad economic trends. Gun laws, government expansion, food prices, crop failures, international tensions - the topics are limitless.
What you want to do is identify events which might affect your various goals.
Let's say you want to store 1 year's worth of dried food away - corn, wheat, oats, beans and rice. You don't know if you should buy it all now in one big purchase, of if you should buy it slowly over the next year.
On what kinds of things should you gather data?
Price/Availability: What is the current price per pound of each item? Are they likely to rise, stay flat or drop in the next year? Let's say your research (crop yield forecasts and expected demand forecasts) indicate prices will remain flat, so there is no rush to buy right now. You could set up a tripwire that if the futures price of any of these commodities increases by more than 5%, you will immediately buy all of your planned volumes of that commodity.
International: What other countries currently consume large volumes of any of the items you want to purchase? You could set up a tripwire for any crop failures or natural disasters which might wipe out any of these country's production.
Government policy: Could any level of government enact legislation that would affect your ability to purchase your products? Most of us remember the unintended consequence from the federal government's decision to subsidize ethanol. It was more profitable for the farmers to sell their corn to ethanol producers than to ranchers or food production facilities, and we saw spikes in the price of corn-fed meat, and riots due to food shortages in Mexico.
Other influences: Since you're interested in crops, you need to be concerned about droughts, insect infestations, blights, etc. Also, does any entity - a large company, a cartel or a government - have any reason to influence or falsify information? For instance, the federal government might very well inflate USDA production estimates to help forestall panic buying by the public.
Accept The Challenge
Being able to anticipate trends and changes is a great skill to develop. It takes time and knowledge to do it right.
I can't stress enough how important the quality of the data you are using for your analysis can be. You should have multiple sources for every piece of information.
"Trust your gut" regarding the validity of the data. Does it make sense?
Try and rely on your own analysis of the raw data. Professional analysts and forecasters usually will have some sort of an agenda. "The world is ending, so buy gold...from my company," for instance.
Use technology whenever possible to enhance your data gathering. We've written about Google Alerts in the past - they are free to set up, and can provide you with a wide variety of information.
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2 comments:
Good points, good advice. Can I add a thought? Unlike a tripwire that is either tripped or not tripped we need something more subtle, more like a thermometer. If the temperature starts rising we might decide to buy teice as much rice or wheat or even toilet paper. If the temperature rises too much or too suddenly we might decide to buy four times as much. Another thing to keep in mind is we don't want to be someone elses tripwire. Don't go into your local big box and buy 100 lbs of rice and 50 lbs of flour. Some of your co-shoppers might be preppers. You don't want to start a run on things you need to buy.
Anon, very good metaphor. I've thought in the past of having multiple tripwires to monitor what you're describing, but I like the thermometer idea better.
I hereby steal it!
The "panic buying" deal is a difficult one. Personally, I'm going to buy something I need, even if it does start a rush. My guess is that so many people are simply clueless about what goes on around them that, unless the government tells them things are bad, they won't recognize the coming emergency.
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