Circle of Poultry Competence: Which Pitch Should You Swing At?
Only go for what you know. The investor's motto that keeps him winning. Avoid the guess work that leads to loss.
Ringfencing the things that you have a confident grasp of (aka defining your circle of competence) creates very distinct boundaries. This leads to success with investment. Which is, of course, applicable to the poultry game.
But how do you define your circle of competence? Where should your confidence dwell as a poultry entrepreneur or investor?
Warren Buffett (the world’s wealthiest and most cash-rich investor) defines his ‘circle of competence in investing’ simply as:
“Understanding the economics of a business 10 years forward.”
In other words, how certain are you that the business in question will be unaffected by likely or unlikely events over the next 10 years. How sure are you that once you’ve put ‘money in’, you’re going to get your predicted ‘money out’ in 10-15 years?
In the interview below, Warren compares his circle of competence as an investor with being a professional batsman in baseball and knowing which pitch (or throw of a ball from a pitcher) to strike or swing at.
The answer?
The pitch you’re most confident that you can successfully connect with and hit as far and high as you possibly can.
Not confident?
Then, don’t swing. But if you know it’s right…then do exactly what you know to do.
And give it everything you’ve got.
Here’s how he put it in his own words:
There you have it.
Now, bringing this back within the frame of your poultry venture.
What about the economics of the poultry market can you confidently say will be unchanged by events over the next 10-15 years?
Think of a standard business PESTLE analysis:
Politics e.g. import tariffs
Economy e.g. inflation
Society e.g. household eating habits
Technology e.g. artificial intelligence
Law e.g. animal welfare
Environment e.g. carbon consciousness
Will any of the above factors stop us from eating chicken, or how we eat chicken? Doubt it.
Eggs? Probably not.
Is it therefore relatively safe to say that the demand for chicken will remain stable over the next 10-15 years…
…probably.
Again, relative to software, or computing, or entertainment, for example, poultry would be a safer arena to play in for most.
That said, there are many ways to run a poultry business successfully.
What are the competitive elements that will enable your poultry enterprise to lock in continued custom, with growth over the next decade?
Not sure…
…then, you need to get into the gym and train that competence.
So, what should your poultry competence training routine look like for increasing your chances of successful swings in poultry?
Speak soon,
Temi
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