Abstract: Despite their widespread use as predictors of the spot price of oil, oil futures prices
tend to be less accurate in the mean-squared prediction error (MSPE) sense than no-change
forecasts. This result is driven by the variability of the futures price about the spot price, as
captured by the oil futures spread. This variability can be explained by the marginal convenience
yield of oil inventories. Using a two-country, multi-period general equilibrium model of the spot
and futures markets for crude oil we show that increased uncertainty about future oil supply
shortfalls under plausible assumptions causes the spread to decline. Increased uncertainty also
causes precautionary demand for oil to increase, resulting in an immediate increase in the real
spot price. Thus the negative of the oil futures spread may be viewed as an indicator of
fluctuations in the price of crude oil driven by precautionary demand. An empirical analysis of
this indicator provides independent evidence of how shifts in the uncertainty about future oil
supply shortfalls affect the spot price of crude oil and how they undermine the forecast accuracy
of oil futures prices. Our model is consistent with a number of empirical regularities and results
obtained by alternative methodologies.

What Do We Learn from the Price of Crude Oil Futures? - killian.pdf (application/pdf Object)

Here it is: The single best forecast of oil prices in one month, three months, or a year is -- [sound of drumroll] -- today's oil price.

With oil prices at exorbitant levels, I'm forecasting that next year's price will also be at . . . exorbitant levels. I'm not saying that prices won't change, but I am saying they're about as likely to go up as they are to go down. Let's call this the no-change forecasting rule. It won't work for everything, but it does pretty well for oil prices.

Marketplace: Here's how to predict future oil prices

And it turns out that they all do worse than one simple forecast: the current oil price. That’s right: the most accurate forecast of oil prices over the next month, year, or quarter is the current oil price. We call this the no-change forecast.

The Alquist-Kilian finding was the subject of my latest commentary for NPR’s Marketplace (available here; or here for the audio version). Here’s the highlight:

Amazingly, this simple rule did better than the average of dozens of professional forecasters! In fact, the no-change forecast was 34 percent more accurate at predicting oil prices in 3 months time, and 18 percent more accurate at predicting prices in a year’s time. While professional prognosticators might argue that this difference isn’t statistically significant, it sure is embarrassing.null

Forecasting Oil Prices: It’s Easy to Beat the Experts - Freakonomics - Opinion - New York Times Blog

When the masses went to see a movie in June of 08, they had a choice. Naturally, they chose to see the movie that was the best available, the one they wanted to see the most. If you're the third best choice, you lose.

The alternative? The makers of Speed Racer could have spent less money and made a movie aimed at pocket 2, a niche movie where they could have easily made it through the Dip, easily overwhelmed competition for that niche, easily become the best in that world.

Bruce Lee wasn't the best movie star in history. But he was the best kung fu star in history. Different dip.

The most common misconception about Long Tail thinking is that if you don't succeed at pocket 1, don't worry, because the tail will take care of your product and you'll just end up in #2. That's not true. #2 isn't a consolation prize for mass market losers. Mass market losers are still losers. In order to become a mass market star you make choices about features and pricing and quality--and if you lose that game, there's no reason to believe that those choices are going to pay off for a different market.

The long tail doesn't offer a consolation prize. Instead, the wide selection (in every market, not just digital ones) is a collection of smaller long tails, each with its own dip, each with its own winners (and losers). Pick the biggest market you can successfully dominate, the biggest slice where you can get through the Dip and be seen as the best in that world. nullnullnull

Seth's Blog: The Long Tail and the Dip

I have seen Monster Cable take untenable IP positions in various different scenarios in the past, and am generally familiar with what seems to be Monster Cable's modus operandi in these matters. I therefore think that it is important that, before closing, I make you aware of a few points.

After graduating from the University of Pennsylvania Law School in 1985, I spent nineteen years in litigation practice, with a focus upon federal litigation involving large damages and complex issues. My first seven years were spent primarily on the defense side, where I developed an intense frustration with insurance carriers who would settle meritless claims for nuisance value when the better long-term view would have been to fight against vexatious litigation as a matter of principle. In plaintiffs' practice, likewise, I was always a strong advocate of standing upon principle and taking cases all the way to judgment, even when substantial offers of settlement were on the table. I am "uncompromising" in the most literal sense of the word. If Monster Cable proceeds with litigation against me I will pursue the same merits-driven approach; I do not compromise with bullies and I would rather spend fifty thousand dollars on defense than give you a dollar of unmerited settlement funds. As for signing a licensing agreement for intellectual property which I have not infringed: that will not happen, under any circumstances, whether it makes economic sense or not.

I say this because my observation has been that Monster Cable typically operates in a hit-and-run fashion. Your client threatens litigation, expecting the victim to panic and plead for mercy; and what follows is a quickie negotiation session that ends with payment and a licensing agreement. Your client then uses this collection of licensing agreements to convince others under similar threat to accede to its demands. Let me be clear about this: there are only two ways for you to get anything out of me. You will either need to (1) convince me that I have infringed, or (2) obtain a final judgment to that effect from a court of competent jurisdiction. It may be that my inability to see the pragmatic value of settling frivolous claims is a deep character flaw, and I am sure a few of the insurance carriers for whom I have done work have seen it that way; but it is how I have done business for the last quarter-century and you are not going to change my mind. If you sue me, the case will go to judgment, and I will hold the court's attention upon the merits of your claims--or, to speak more precisely, the absence of merit from your claims--from start to finish. Not only am I unintimidated by litigation; I sometimes rather miss it.

I will also point out to you that if you do choose to undertake litigation, your "upside" is tremendously limited. If you somehow managed, despite the formidable obstacles in your way, to obtain a finding of in... [ Read More (0.1k in body) ]

Blue Jeans Cable Strikes Back - Response to Monster Cable — Reviews and News from Audioholics

Magento is a feature-rich, professional open-source eCommerce solution offering merchants complete flexibility and control over the look, content, and functionality of their online store.

PayPal Solutions Directory - Express Checkout Compatible Carts - Magento - Open Source eCommerce

Neat market for selling handmade items - where people are willing to pay a premium for that.

Etsy :: Your place to buy and sell all things handmade

This new service lets you tap into ATDC’s more than 20 years experience helping entrepreneurs launch and build technology companies.

In the library at our headquarters and this virtual Web center, you can find resources to increase your speed and opportunity for a successful startup.

ATDC Entrepreneurs Resource Center

Since 1919, Western Textile has specialized in manufacturing custom made bags and other textile items for companies around the country.

We have worked hard to develop a reputation for quality, reliability, service and value. Over the years, we have successfully manufactured custom products for a long list of Fortune 500 companies, along with many projects for medium and smaller sized companies.

Our experience over the years involves everything from custom imprinted tote bags for trade shows and conferences, to elaborate custom designs aimed at fulfilling a customers specfic proprietary needs.

We utilize our manufacturing facilities in San Francisco, CA, and El Paso, TX, thereby increasing sourcing options for our customers, and ensuring speedy order completion.

To the left is a sample of some of the custom designed products we have manufactured.

Possibly a good place to have handbags manufactured.

Western Textile & Manufacturing Inc - Custom Made Bags

Some questions marketers must ask: Does this interaction lead to connections? Do our products support our story? Is the story pulling in numbers that demonstrate that it's working?

In that light, what are you working on? If it's not one of these five, not going to seriously change the dynamic of your marketing, why exactly are you bothering?nullnullnull

Seth's Blog: Five easy pieces