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Don’t Forget! You Saw it in the
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June 2021 #13263 Page #108
Lumber Briefs By Matt Layman Publisher, Layman’s Lumber Guide
Disruption, Distortion, and Decision Points Minor & Major FDPs
F
orecasted Decision Points, FDPs, will be my legacy. These markers of when the price of lumber will rise and fall are misunderstood by at least 90% of our lumber industry. The reason is the same as why I do not understand what holds the universe together. I am fascinated by the stars, planets, and solar systems to the point of knowing a few constellations, but I have no clue how the big ol’ universe stays together and works. I acknowledge my lack of understanding and am not so foolish as to make assumptions that astronomers are guessing. My ignorance or lack of understanding does not create a space for other experts work to be minimized. The sun rises and sets every day, never at exactly the same time and position, but still close enough for me to plan my life by it. I won’t try to compare LLG’s FDPs to reliability of the universe, but I will insist that our lumber market is merely the expression of repeating human behavior that is governed by life and seasonal cycles. These repeating cycles are influenced by occasional disruptions, and, even then, our reactions to the events are equally as predictable. Where we err is in the miscalculation of human response. After the fact we always see clearly. The best example of this is the 2020 lumber market. Our initial response was completely the opposite of what the reality was. We thought decreased lumber demand, totally overlooking the obvious scramble to flee to the suburbs and spend vacation money on lockdown DIY projects. It’s all about timing. Eventually, we humans will revert to our root behaviors, which means the FDPs may get jolted out of alignment by unforeseen disruptions, but, over time, they are the only logical forecaster of price movement, because they forecast how we will behave based upon how we usually behave. We have a minor FDP this week, projecting a short composite reversal and a longer SYP reversal. Each FDP is a new one, a stand-alone event not a carry-over from a previous one.
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