From: myfirstmillionpod
Kevin, a self-described “farm kid” from a small rural town in Missouri, initially entered the trading business through connections he made while working with the NFL [00:08:49]. He started at the bottom as a phone clerk, then moved on to trading Swiss Francs, Demarks, and foreign currencies at the Merc, and later treasuries [00:09:25]. His career evolved to include arbitraging e-minis against bigger S&Ps [00:10:43]. His strong suit eventually became grains, particularly corn, due to the increased interest from ethanol production [00:10:52].
The Van Trump Report: Agricultural Commodity Insights
Kevin started the Van Trump Report as a personal journal in 2007, aiming to become a better trader and investor after experiencing financial setbacks [00:11:39]. He would send his notes to friends, and they began circulating among significant financial entities, including individuals at Goldman [00:11:55]. This organic growth led him to start charging $40 a month, initially thinking of it like a storage unit deal, which then “took off and went nuts” [00:12:10]. The newsletter has never been advertised and boasts subscribers in about 45 countries [00:12:18].
The Van Trump Report, available at VanTrumpReport.com, is a daily newsletter that focuses on agricultural-based information for farmers and commodity traders [00:06:27]. It is also read by politicians to understand the agricultural world [00:06:46]. The report provides commentary on market direction and is written in an informal, “straight shooter” style, often including memes [00:07:54].
The report’s revenue model is based on subscriptions, with around 30,000 to 40,000 subscribers paying approximately 18 million annually [00:07:07]. The core team consists of Kevin, a friend who was a golf pro, a college buddy, Stacy (who helps with content), and his son Jordan, with his wife handling bookkeeping [00:07:10].
Investment Philosophy and Decision-Making
Kevin emphasizes that in trading and investing, perspective is key, and one can be “blindsided a million different ways” [00:04:17]. He actively seeks to broaden his perspective by being around younger people, noting that older hedge fund friends and traders tend to become more cynical and bearish because they don’t understand newer trends [00:04:25]. This philosophy led him to attend diverse conferences, even those unrelated to his industry, to intentionally challenge his worldview [00:03:09].
Poker vs. Chess Analogy
Kevin views life and investing more like poker than chess due to the presence of unknowns (cards face down) and luck [00:20:51]. He highlights that even brilliant people can struggle without breaks or luck [00:21:07]. A key takeaway from this analogy is the importance of discipline:
- Amateur players tend to play too many hands [00:22:00].
- Professionals only play 15-20% of their hands [00:22:04].
- The trick is to “pass on the average opportunity to save room for the huge opportunity,” similar to Warren Buffett’s “waiting for the fat pitch” [00:22:09].
He stresses the importance of patience, waiting for the market to make a mistake, get out of alignment, or become overleveraged [00:23:44]. The greatest traders, he notes, make most of their money “sitting and waiting,” and the decision to do nothing can often be the best decision [00:23:57].
Trader vs. Investor
While many investing greats “poo poo” traders, advocating for a “buy and hold” approach, Kevin acknowledges his background as a trader on the floor and exchange [00:25:08]. He clarifies that his firm doesn’t engage in day trading, which he calls a “miserable business,” but rather swing trading (multi-day positions) [00:25:57]. He agrees that for most passive investors, a long-term hold strategy is probably the best way to build wealth [00:26:41].
Diversifying Wealth Beyond the Newsletter
Kevin’s personal wealth-building strategy has involved taking revenue from his newsletter business and investing it in various other vehicles and sources, rather than solely reinvesting in the newsletter itself [00:27:38].
He has invested in:
- Real Estate: This includes commercial properties, single-family homes converted to Airbnbs, land, and farmland [00:27:11]. These have been his biggest winners [00:27:29].
- Agtech Startups: He is an early investor in agtech startups through a private firm called iSelect, as well as some biotech ventures [00:27:55]. He notes that while there have been “tons of losers,” these investments have led to meeting new people and learning new things [00:28:05].
Agriculture Industry Trends
The agricultural sector is currently facing headwinds due to significant jumps in interest rates and an oversupply of corn and beans [00:28:35]. Argentina’s corn production doubled, and China has not been buying new crop beans, which is unusual [00:29:10]. There are concerns about potential new tariffs with the upcoming election [00:29:26].
However, there are also emerging opportunities:
- Sustainable Aviation Fuel (SAF): Soybeans are now being used to produce SAF, and there’s a push for corn production to also be used for this purpose [00:29:51]. This indicates a trend towards “food for fuel” and cleaner energy sources [00:30:09].
- Increased Land Utility: There’s a growing demand for land to be used for solar fields, wind fields, and massive data centers, particularly in the Midwest, where data is becoming the “new oil” [00:30:22]. This diversification of land use increases its overall utility and value [00:30:22].
- Direct-to-Consumer Models: More farmers and ranches are selling direct to the public, such as Texas ranches selling beef directly to consumers [00:33:14]. This allows them to capture more value from their products [00:33:14].
- Agricultural Technology (Agtech):
- Animal Tracking/Monitoring: Technology like “Fitbits for cows” (RFID tags) is being developed to monitor animal health, identify sickness earlier, and reduce antibiotic use [00:44:32]. This technology also helps with accountability for animal welfare, allowing consumers to track how much an animal walked around [00:45:56].
- Blockchain in Farming: The concept of “blockchaining the farm” involves tracking fertilizer and input usage to ensure transparency and rapid identification of issues, similar to how E. coli outbreaks are traced [00:46:49].
- Alternative Meat Movement: Kevin believes there will be a growing segment for alternative protein sources, which will continue to gain market share as technology improves flavor and reduces costs [00:48:18].
- Blue-Collar Businesses: A significant opportunity exists in acquiring and rolling up blue-collar businesses, as many current owners are retiring and there’s a short supply of skilled labor due to fewer young people entering trades [00:51:40].
Investing in Farmland
Farmland is seeing increased interest from wealthy individuals and institutions, including the Gates Foundation and Buffett’s group [00:32:47]. When buying acreage, there are two primary bidders:
- Neighboring Farmers: Farmers whose land abuts the property are often willing to pay a premium because the land may only become available once in a lifetime, and it makes logistical sense for combines and other machinery [00:35:17].
- High-Profile Funds: Institutions like the California teachers pension fund and other hedge funds are bidding on farmland for its longer-term appreciation potential [00:35:34].
Prices for acreage can vary significantly, with rare instances of 5,000 to $15,000 per acre [00:42:47]. Factors to consider when buying farmland include water rights (e.g., in Kansas, new wells cannot be drilled) [00:43:28]. Kevin and his associates favor corn and bean ground, and land in flood plains or water-deficient areas, believing that new technology and investment from large foundations will help grow crops in less ideal soils [00:43:41].
One way to invest in farms is through companies like AcreTrader (AcreTrader.com), which buys entire farms from families and then partners with local farmers for revenue sharing or crop sharing, holding the land for long-term appreciation over 10-12 years [00:41:29].
Succession Planning in Agriculture
Succession planning is a “huge issue” in the agricultural world, with an estimated 80% of farms owned by individuals over 60 [00:34:02]. Many children of farmers have pursued other careers and do not want to return to farming [00:34:20]. This lack of planning means there will be significant “rollover” and “turnover” of farm properties [00:35:11]. This trend, combined with the increasing interest from large funds, suggests that private equity and institutional investors will own a growing number of farms [00:35:08].