A Trilogy of Reports by John Tobin
Pecunia Fluxio Positivas Est Felicitas
Happiness is a positive cash flow. When stated in Latin this admonition has so much more class and meaning than just the obvious message in this statement. You are in business to make money. Therefore, even kicking and screaming, you must consider the price of the product you are selling.
This trilogy of reports (just like other trilogies from the netherworld as the “Lord of the Rings”) is designed to raise even more points to ponder about energy so as to stimulate discussion and to update where appropriate, or inappropriate as the case may be, some of the analysis and observations from the author’s previous work that is now broken down into three separate yet connected reports.
Subscription
These reports are offered on a subscription basis. The topics of price and policy are fluid. Therefore, the subscriber will receive timely updates throughout the current year at no additional costs. These updates will be based on 1) events that the author considers significant, 2) are requested by PennEnergy, and 3) are requested by current subscribers. The subscriber will also be able to renew the subscription for the following and future years at a discounted rate. Contact PennEnergy Research for subscription details.
Year End Special
These reports are updated annually and will be available in early 2011 reflecting not only year-end data, but also an early look at the political environment with a new Congress in place. Those subscribers who sign up for these reports before the end of 2010 will receive the 2011 updates at no charge.
The Trilogy
1. Why Bother and How to Use and Avoid Misuses of Probabilistic Forecasts
Why Bother is a layman’s explanation of probability and how to apply its insight in the investment decision process. The report recognizes that any credible forecast must recognize future uncertainty and account for extremes that may happen no matter how remote a chance of such occurrence is foreseen at this time.
After all the recognition of uncertainty is:
Intellectually honest
Maximizes Information
Minimizes unwarranted detail
2. Accountability in Energy Price Forecasting -- What a Novel Idea
Accountability offers a long-term probabilistic forecast of energy price, based on fundamental and technical analysis of market drivers. This report builds a distribution for price identifying many factors that can pull price into a constant state of volatility. Indeed if prices were not volatile, there would be very little need for price forecasts or price forecasters. And based on the track record of these forecasters, this wouldn’t be such a bad idea under any circumstance.
3. Points to Ponder about Energy Policy and Politics
Points to Ponder completes this trilogy by discussing how many political actions have economic consequences on the price of energy. They are offered as points to ponder in that the author really cannot offer any definitive answers, but opens the discussion as a path to improved energy literacy for anyone within the industry or the public in general. This is done in the hopes that a more informed consumer base will force greater stability and transparency in energy policy and thereby minimizing any price premium needed to cover current political uncertainty.
