Applying stock market theory to farming
Greetings from Vinagra Village in Alentejo Portugal
I want to know what it takes to launch and grow an ecological business after 60.
In finance, where I spent most of my life, there is a theory that suggests that asset price volatility and historical returns will revert to the average. We call it reversion to the mean. I am now trying to apply that theory to farming. The last 2 years have been very dry, with almost no rain, so I expect this year will revert to the mean, with more rain.
Fresh water is a scarce resource in the Alentejo, so last November we have taken to rain water harvesting, helping to mitigate droughts. A group of lakes were designed and created for that purpose. The water which is collected in the winter months, allows rain water to infiltrate on the landscape following the SSS principles, namely slow, spread and sink.
Going back to our reversion to the mean. At the end of September it is normal to have the first rains in the Alentejo, and this time like clockwork we got it. It is normal because things tend to follow certain familiar patterns, in this case the beginning of Autumn.
This does not mean that I now have become an expert in weather, I have not. I just don’t want to be the farmer that blames the weather, I am just the fool who believes he can beat the weather, with stock market techniques.
But the reason we are talking about the weather is because we were waiting for the first rains to put in fence posts. It’s hard work when the soil is soft, it’s an almost impossible job after 9 months without rain. We need to dig the holes with a brand-new post-hole digger, sink the posts in them and add some cement, after packing the dirt around.
We will only put these posts in the corners of the many different paddocks that we have created to sustain the electric fence. The paddocks are necessary to apply practices from Savory Institute, using animals to help the restoration effort of our damaged soil, to be able to grow produce.
The future is now, trying to evolve from entrepreneur to become ‘’an ecopreneur’’ as if we were just starting out in life, trying to understand how the world works.