Trading Cattle "Beef Bonanza" in 1860s in America

I once heard a story how cowboys traded their cattle between 1860s - 1880s -period known as "Beef Bonanza". I cannot confirm if this particular story is true, but it goes like this.

Cowboys met to trade cows, and one cowboy, lets call him John would approach Bob and would offer him $100 for 6 of his cows. Bob would say $110 is the minimum price he can accept, everything under $110 would cause him stomachache. John said, ok, let's meet half way at $105, and I will take you wonderful cattle. Bob accepted the offer with some pain. Few week later, John and Bob would meet again, and John would say to Bob, --- listen, I like you cows, they are great, I milked them, and bathed them, I fed them, they are great, but I would like to sell them back to you for $120, since I was taking care of them for 2 weeks. Bob said that he cannot accept the offer, but he is willing to purchase them back for $90 since Bob thinks he sold the milk and made some profit there. John, said that $90 is too little and he will just go to the next cowboy, who will pay $100 or more for them. Bob didn't want to lose this deal, he wanted to make sure he gets his cattle back, he was emotionally attached to this cows and he said to John, OK - $100 for all 6 and we call it even. John replied with a counteroffer of $105 - they shook hands and deal was done.

Turnover $220. No profit.

This story seems laughable and ridiculous, we are observing this event from 21st century and laugh. Yet, this is how they did business, it was all about deals, who gets more deals during great beef bonanza in 1860s to 1880s.

Hundred years from now or probably even less, people will think that our stories of dot-com bubble and financial crisis of 2008 are laughable and ridiculous. I think they are now.

Internet company in 1999 with market-cap of $10 billion and no earnings. Forecast - no earnings. You couldn't even tell where the earnings would be coming from, but the value of this void was $10 billion. You would actually need to come up with $10 billion to buy void with a nice logo and dot-com domain.

It's deeply rooted in people's nature to do this and to keep doing it. We will see it again and again. Again, follow the craziness, whether it is taking place on the downside by investor's being too skeptical  or on the upside where they are being to positive. Out of any craziness you will find value. However, it takes character to observe this game on the sidelines with cash in hands and not wanting to play.

Happy investing!

Damian Kosutic