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Shale Boom, Shale Bust: The Myth of Saudi America

Having read his earlier book, Oil’s Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy, in 2011, I highly recommend Dan Dicker’s latest book, Shale Boom, Shale Bust: The Myth of Saudi America.

Up until the latter part of 2014, the American shale oil boom seemed to promise that North America would become energy self-sufficient. However, just as we began to prepare to welcome 2015, OPEC began to increase its production thus lowering the price of crude oil, in order to regain its historical market share. This change posed a significant threat to the US shale oil industry. Dicker’s book walks us through the shale oil story.

The first chapter, “Saudi America,” provides the foundation for the shale oil story. It begins with US Energy Information Administration graphs depicting expected shale gas and oil production. Then, a broader picture is developed showing a cost curve for various sources of oil found across the globe. Because shale oil is more expensive to produce than conventional OPEC oil, the United States can never live up to the hype of Saudi America.

The next chapter, “Shale Oil Is a Ponzi Scheme,” begins with a discussion of shale oil decline rates. Shale oil production declines rapidly, with more than half of an entire well’s production occurring within the first two years. The first six months of a well are the most prolific. Thus, shale oil is much like a Ponzi scheme in that more wells need to be drilled simply to stay ahead of the massive declines in production.

The third chapter, “Shale Scalability and Results,” discusses the economics of oil shale. With its lower upfront costs and fast quick production profiles, shale oil drilling will be quick to react to changes in oil prices. When prices are sufficient, activity is brisk with economic shale oil production. When prices are low, the converse is true. Coming into 2015, some of the shale oil players were hedged. That hedge allowed them to continue throughout 2015 without the full burden of lower oil prices. As shale oil producers work their way through 2015 and much of their hedges, they will collide head-on with declining production and lower prices.

The next chapter, “The U.S. Export Ban on Oil,” provides a historical background about why oil exports were initially banned and why, in Dicker’s view, they should continue to remain banned. A key underpinning argument is that shale oil is a limited resource.

The fifth chapter, “The Collapse of 2014 Oil,” discusses the reasons why oil prices tanked. Dicker identifies the following five reasons, listed in no particular order of importance:

  1. The rising strength of the US dollar;
  2. The defensive market share posture of Saudi Arabia within OPEC;
  3. The increasing production of US shale oil and resultant global “oil glut”;
  4. The continuing malaise of China and European economies; and
  5. The demise of US investment banks’ commitment to oil marketing—the hiatus of the endless bid.

Each is described in further depth.

The sixth chapter is a continuation of the earlier chapter. Each of the five factors is explored and analyzed for its effect. I found the fifth reason along with the effects especially interesting because I had neglected to consider it prior to reading this book.

“Three Phases to Shale Bust” is the next chapter. The chapter begins by discussing how oil prices can move to extremes, both on the upside and downside. Next, “Phase 1: Living Through the Oil Price Crash,” covered the period starting from early 2015. “Phase II: The Capital Chase: Cutting Jobs, Raising,” discussed the industry’s reaction to low oil prices. Last, “Phase III: Consolidation of Asset Ownership,” which is close to where the industry is now as I write this review, outlined expected developments as many companies face the inevitable cash crunch.

The old saw is that the cure to low prices is low prices and the cure to high prices is high prices. With the cure of low prices forcing consolidation, the seeds for the next oil boom have been sown. “The Next Boom” discusses the onset of the recovery. This eighth chapter discusses the expected global oil demand that exceeds the existing base production. That then leads to capital expenditures to increase production to meet future demand. Dicker outlines some key assumptions that support his position.

After the eighth chapter, Dicker presents “Conclusions,” where he states the “…United States is not one step closer to finding a unified energy policy that works, and the U.S.—despite its tremendous success with shale—is going to end up without the energy independence from foreign oil it craves. In my opinion, Washington and particularly the President are to blame for this.” He then goes on to provide more detail and some ideas for policy considerations.

His final chapter, “Addendum: Boom Bust Investing,” covers three key topics for investors who want to capitalize on the changes in the shale industry. “Investing in Exploration and Production ‘Survivors’” is as the title suggests: Invest in those companies that will survive. In his book, Dicker mentions specific companies for consideration. Next, “Investing in Pipeline Companies” is covered. And last, “Investing in the Cash-Rich and Opportunistic” discusses investing in those companies that are to take advantage of this downturn.

Again, I highly recommend Dicker’s book. Through his years of experience of being an oil trader and investor, he will provide you with thought-provoking material.


Photoshop LAB Color

In an earlier post, I mentioned that I was working with Dan Margulis and several other beta-readers to complete Margulis’s book, Photoshop LAB Color: The Canyon Conundrum and Other Adventures in the Most Powerful Colorspace (2nd Edition). We completed our task and his book has been available on Amazon since late July.

Although the beta-reading process was demanding, I thoroughly enjoyed working with Margulis and the other beta-readers. It was demanding because we had to read each chapter carefully, perform the exercises, and provide comments that might be helpful to Margulis. He read our comments and decided whether to use our suggestions. After each chapter was complete, in a private forum Margulis singled out beta-readers who spotted something unusual and who had particularly helpful insights. For example, if we all spotted the same item, none would be singled out. However, if three or less of us found something, then he would mention our names. While we beta-readers worked hard, I know that Margulis worked much, much harder at creating the content, reviewing all of our comments, and then reworking his chapters.

In choosing his fourteen beta-readers, Margulis picked people who represent different segments of his audience. I represented the advanced amateur. Thus, I might have had to work somewhat harder than most because my skills and experience are not as strong. I had an advantage, however, in that I had to rely on what was written and not my own background and skills.

The reason I enjoyed the process so much is that I worked hard, learned a lot, and met some great people in a virtual setting. It’s fun to be part of a successful project where I can contribute and give back to the larger photography and Photoshop communities. And, of course, I am always happy to help my friend, Dan Margulis. I am grateful that he allowed me to be a part of his team.

I wrote a review of the book on Amazon, which I have included below. If you are a Photoshop person, I highly recommend Margulis’s book.

My Review on Amazon.com

Many years ago, I purchased Dan Margulis’s book “Photoshop LAB Color: The Canyon Conundrum and Other Adventures in the Most Powerful Colorspace.” At that time, I didn’t understand Photoshop’s channels and certainly didn’t understand LAB colorspace. Being relatively new to Photoshop, I was eager to dive in and learn. When I finished the book, I had an understanding of channels and LAB.

To many people, LAB seems like an esoteric and foreign colorspace. I found, however, that LAB made more intuitive sense than RGB. For example, I know that for the A and B channels, positive values are warm and negative values are cold. I like that the L channel is luminosity. To me, LAB readouts are logical and intuitive.

While I still do some of my work in RGB and occasionally in CMYK, my workflow makes extensive use of LAB. It’s in LAB where I boost or strengthen colors. Once you read the book, you’ll have a better understanding as to why more than one colorspace is used to complete an image.

Dan’s latest book is, of course, even better than his original book. Over time, Dan gained more knowledge through experience, and much of that knowledge has been passed along in his latest book.

In reading both books, I found that some of the supposedly easier chapters were more difficult than some of the supposedly more difficult chapters. Dan’s books require concentration to fully absorb the material. My process with the first book was to read the book cover to cover and then to reread it again. Then, I selectively reread portions where I needed further review. Having the good fortune of being chosen as a beta-reader for his latest book, I read each chapter as soon as it was released. Even with my prior background, I still had to work at fully understanding everything. Furthermore, I often read the chapters more than once.

While the prior paragraph might make the book seem overly difficult, that would be the wrong impression. Instead, you must be prepared to work to understand the material, especially if you are still on the steeper portion of the learning curve with respect to Photoshop. I am not a Photoshop guru. If I can learn the material, so can you.

Is LAB a cure-all or some magical colorspace that solves all issues? No, neither. Instead, LAB provides you with more arrows in your quiver. As you read through the book, you might find yourself occasionally thinking, “I might tackle this issue in another colorspace using a different approach.” That’s perfectly acceptable. Dan’s book is geared toward LAB. So he does everything in LAB to show you some different alternatives. You might find that you combine some of your techniques with his. There are, however, many methods or techniques within LAB that can’t be duplicated in other colorspaces. And, that makes LAB extremely powerful. Dan’s book provides you with additional resources that you might not have possessed.

Having said all that, let’s quickly review the chapters.

Chapter 1: The Canyon Conundrum

It’s a quick introduction to LAB. You will see LAB at work with some easier examples.

Chapter 2: LAB by the Numbers

Readers begin to understand how numbering systems work and how the channels work.

Chapter 3: Freedom and Responsibility

You learn about the power of LAB. One of challenges is not going overboard with LAB. The overall aesthetic you are trying to achieve will determine how much extra color you may decide to add.

Chapter 4: Too Much is Just Right

Throughout his book Dan teaches us that it is better to go too far, and then back off the intensity. He presents several methods for doing so. Another key learning is that it’s okay to go too far so long as critical elements of the photograph are kept in check. One challenge when working on images, however, is that we often become desensitized to our own creative work.

Chapter 5: Knowing Right From Wrong

Earlier I mentioned that I found LAB more intuitive because positive values in the A and B channels are warm. This chapter takes that whole discussion much further.

Chapter 6: Sharpening for The Impressionist

Dan provides a comprehensive discussion on sharpening, including why you might sometimes want to sharpen in LAB.

Chapter 7: Entering the Forest: Myths and Dangers

Some common misconceptions and myths are explored. As an example, is the best way to convert to a black and white image simply to use the L channel from LAB? While I won’t provide the discussion, the answer is, no.

Chapter 8: The Readers Sum It Up

Here the beta readers contribute some of their knowledge and experiences.
As we enter the second half of the book, the material generally is more advanced. As mentioned, sometimes you may find the more advanced material easier than the earlier material.

Chapter 9: The LAB Advantage In Selections and Masking

I found this chapter very powerful because it unleashes how to use LAB and its channels to create very effective masks.

Chapter 10: The Product Is Red But the Client Wants Green

For those that often change colors, say of garments, this might be the most important chapter for you. For others, it is more arrows in your quiver.

Chapter 11: The Imaginary Color, The Impossible Retouch

LAB allows us to create colors that are impossible, imaginary colors. We can sometimes create these colors to put color back into blown out and overly dark areas.

Chapter 12: The Best Retouching Space

For certain types of retouching, LAB has advantages over RGB and CMYK colorspaces. Dan provides some great examples of where LAB excels.

Chapter 13: The Music of Noise

Marco Olivotto, another beta-reader, largely wrote this chapter. It was one of the most popular chapters for our beta reading group. The topic, of course, is noise reduction.

Chapter 14: Command, Click, Control

I enjoyed this chapter because I learned how to easily create color differentiation amongst items that have a similar color.

Chapter 15: LAB and Video

Dan shows how LAB can be used in Photoshop to add more punch to your videos.

Chapter 16: The Universal Interchange Standard

Dan provides a discussion on colorspaces, color models, conversions, and calibrations.

Chapter 17: Blending With the A and B

A and B channels are used in creative ways for blending purposes. Even though A and B contain no detail, they can be used as blend sources to separate objects based on their color.

Chapter 18: Canyons, Concepts, and Changes

In many respects, this chapter is a review and discussion of the prior material readers have been exposed to.

The book contains a tremendous amount of information. For those of you who have read his first edition, you should know what to expect in terms of difficulty and rewards. For those who are new to LAB, this book will be extremely beneficial. At times, you will likely find it challenging, but your prize at the end of the process will be worth your effort. You will have a much better understanding of channels, LAB colorspace, and what LAB can do for you.

For my own personal work, when working with LAB, I am faster and more efficient. And, most importantly, I get much better results.


Peace Bridge Just Before Sunrise

Peace Bridge Just Before Sunrise

I arrived at Calgary’s Peace Bridge on Sunday, July 19, 2015 just before sunrise and shot this photograph. The cool morning tones with just a hint of pink sky in the background, along with almost even lighting, creates an interesting photograph.

For those who are not aware, the Peace Bridge is a pedestrian bridge that crosses the Bow River in Calgary, Alberta. Santiago Calatrava is the architect who designed the bridge. Because of its costs and delays, it was a controversial project. Despite its initial issues, I like its striking design.

Although I have been busy, I wanted to share with you this latest photograph.


Nat Christie Centre – Alberta Ballet

Nat Christie Centre -  Alberta Ballet

On Thursday, June 25, 2015 I took a photograph of the Nat Christie Centre, current home of the Alberta Ballet.

I have wanted to take a photograph of this historic building for some time. One of the challenges, however, is that it faces north, which at Calgary’s latitude of 51 degrees means that the sun rarely kisses the front of the building. June 25 is very near the summer equinox, when the sun is at its furthest northern point. I was able to capture this photograph during the late evening at very nearly 8 p.m. when the sun was low on the horizon, at about 15 degrees. I like how the sun casts warm shadows across the building.

I recently attended an Alberta ballet lighting presentation in the Nat Christie Centre. One interesting thing that struck me was that the dance studios are warmer than typical room temperatures. The reason for heated studios is to keep the dancers’ muscles warm, thereby reducing injuries.

The Nat Christie Center itself has an interesting history. Constructed in 1905, the building initially served as a parish hall for St. Mary’s Roman Catholic Church, including a 500-seat theater used for various purposes by the community. Later, in 1911, the Canadian Northern Railway bought the building and surrounding property. The facility continued to serve as a train station until 1971. Then, in 1979 the city of Calgary purchased the train station, and it was designated a provincial historical building. Five years later, with funding from the Nat Christie Foundation, Alberta Ballet became its latest and current resident. You can read a more complete description at the Collections Canada Alberta Arts Heritage website.


This past weekend, Rachel Notley, leader of the New Democratic Party, was sworn in as premier of Alberta.

Because the last few premiers have not been good, I had hoped that Jim Prentice would be our next elected premier, and that he would be able to make many improvements. Prior to the campaign, however, oil prices crashed and Albertans became grumpy, and, during the campaign, he made a few but critical political stumbles. That and because people were hungry for change, he was defeated.

So here we are with a left leaning leader. Now, many Albertans are overjoyed while many others are fearful. For those that are overjoyed that their left leaning voices will finally be heard and acted upon, you’re in for disappointment. While I expect your voices will be heard, the reality of low oil prices will not allow the NDP to enact many of its desired changes. And, for those that are fearful, relax. It won’t be as bad as you fear. The NDP will realize that many Albertans did not endorse their platform, but rather voted for change. So it will have to adapt to the needs and wants of Albertans while operating within Alberta’s political and economic constraints. That will not be easy.

Because of the economic realities, the next four years are likely to be challenging. It wouldn’t have mattered which party assumed power. Having a new party with a new leader isn’t such a bad idea, though. Notley can review prior government decisions and actions to make improvements where possible. That’s a good thing.

The Progressive Conservative Party can regroup and assess its errors. With this defeat, some of the arrogance and feelings of entitlement should be diminished. Moreover, it’s a good wake-up call to the corporate sector that not all Albertans share their viewpoints.

The next four years will prove interesting. I wish Premier Rachel Notley well as she launches into her new role. While her job won’t be easy, I am positive that it will be interesting.

For another viewpoint, Ian Austen of The New York Times wrote, “After a Political Reversal in Alberta, ‘Anything Seems Possible’.” Please note, a subscription to The New York Times might be required.


Keeping Busy

This is just a short post to say that I have been keeping busy, though I don’t have much to write about. As mentioned in my prior article, I am still helping my friend Dan Margulis with his book. We are getting close to the end of the project, so I am excited to see his finished product. And, I have been busy bashing away on a few personal projects.

With the summer fast approaching, I hope to get outside more and engage in more photography. Then, I will have some photographs to share with you.

So that’s it for now.


With A Little Help From My Friends

New Beginnings - Bow Falls

I took the above picture near Bow Falls, within the town of Banff, in Banff National Park, Alberta. And below, is the same picture but straight out of the camera. As you can see, I enhanced the colors. You can click on either photo to be taken to a larger version at Flickr.

New Beginnings - Bow Falls

By being a beta-reader, I am helping Dan Margulis, a friend and a best-selling author, write a new book on Photoshop. I, along with 13 others, am proof-reading his text, making sure that everything flows, the discussion and examples can be readily followed, and, we hope, there are no typos.

For those that are unfamiliar with Dan, he has already written several highly acclaimed Photoshop books, including: Professional Photoshop: The Classic Guide to Color Correction (5th Edition); Photoshop LAB Color: The Canyon Conundrum and Other Adventures in the Most Powerful Colorspace; and Modern Photoshop Color Workflow The Quartertone Quandary, the PPW, and Other Ideas for Speedy Image Enhancement. We are working on a follow-up or revised edition to his Canyon Conundrum book.

Although I am strictly an amateur photographer who enjoys working with Photoshop, I have read Margulis’s books, which many readers consider difficult but worthwhile, and have taken two of his courses. That said, to become extremely good at photography and Photoshop, one needs to gain considerable experience with each. I am improving, slowly but surely. Every time I take a new photograph and process it through Photoshop, I learn something new.

To keep learning, I am observant and willing to experiment. As mentioned in my photography articles, I compare my results to what I had envisioned. That usually helps to spot mistakes quickly. And, I am willing to try different techniques or methods, both in photography and Photoshop.

Returning to Dan’s book, the beta-reading exercise is a challenging but rewarding endeavor. The challenge is to understand everything and that takes some effort. I have had to read some parts two or three times. Because of my limited experience and proficiency, I might be working harder than others in our group. That said, we each fill a certain demographic of Dan’s expected readership, so I am helping to fulfill the serious amateur role. Moreover, each of us works independently to provide feedback. As I have commented to others, being a beta-reader is much like being a student taking a graduate level course—it takes a lot of hard work and effort. The great news is that it is rewarding because I have the opportunity to gain more insights and experience.

As you’ve seen from a prior post, on February 23, I went out to Banff to take photographs. My favorite photograph from that day is the one at the top of this article. The most difficult challenge I had in retouching it in Photoshop was the blue shadows on the ice immediately in front of the camera. I deliberately brought out color variation from the trees and the rocks, but that move also intensified the blue shadow, so much so that it looked garish in my first iteration. One of the unfortunate aspects of working for a while in Photoshop is that you become inured to overly strong colors. Soon, they begin to look proper and normal. It’s only when you step away for a while or someone else comments on your photograph that you begin to see the problem.

In this case, I was unsure how to treat the overly blue shadow. Dan has an online Color Theory Group where other enthusiasts can exchange information. I posted my dilemma and asked for help. Another enthusiast Les De Moss came to my rescue. He just happens to be a former beta-reader for Dan’s books, just happens to own a color lab, and just happens to live in the Rockies. He provided a sample file where he showed how to split the file into parts and treat each separately. So everything but the ice was one part, which I already had completed, and the ice with the blue shadows was the second part. Once I knew how to treat the ice, I didn’t take long to finish both parts and recombine them.

All that said, I am happy with my final result. You, of course, will have to form your own opinion.

Every exercise increases my learning and experience. In this instance, I learned how to work with blue shadows on white snow and how to separate and recombine parts of a photograph. The other positive aspect of this type of learning experience is helping and receiving help from others—a little help from my friends.


Winter Photography

Solitude - Lake Louise - Banff National Park

This past Monday I went to the Rocky Mountains to take photographs at Lake Louise and some other areas within Banff. In the past, I have engaged in photography during warm weather only.

I learned that winter photography is less forgiving than during the summer. One obvious challenge is the colder temperatures. I took my gloves off and used my exposed fingers to work the camera. After a few minutes, my fingers were surprisingly cold. Another challenge is that the sun hovers low over the horizon during the winter. So, catching the ideal time to photograph an area becomes more difficult, especially in the mountains where the sun has to rise over them.

To create great photographs, a photographer needs to be very picky about the specific time of day within a particular season and weather conditions. In the summer, I typically visit a few locations and get okay photographs. In the winter, that becomes more difficult. Although I went to great locations, the lighting conditions simply did not work. I recall one instance in the early afternoon where the sun was low on the horizon and almost shining directly into the lens. And, in another, the long shadows over the valley detracted from the overall view. So if I go back during the winter or early spring, I will need to visit these locations at better times.

Every photography trip adds to my experience and knowledge. I always come away with some added insight about how I want to approach my next trip. I find photography is much like writing—it takes an inordinate amount of practice to become good.


Have Oil Prices Bottomed?

Have oil prices hit bottom? While I don’t know the answer, I have a hunch that we might have bottomed or might be close to bottoming. In a Financial Times article “Opec chief says oil prices could soon rebound” (subscription might be required) on January 26, 2015, Abdalla El-Badri indicated that prices might have bottomed.

Oil prices may have hit a floor and could soon rebound, said the secretary-general of Opec, the oil producing cartel, on Monday.

After hovering in the $45-$50 a barrel range, Abdalla El-Badri said, “maybe prices have reached a bottom”.

Speaking on the sidelines of a Chatham House conference in London, Mr El-Badri said to the Financial Times: “How long will it last? I don’t know … but I am sure the price will rebound.”

In a New York Times article “Oil Prices Surge 8% After Long Slide Down” (subscription might be required), there were a few factors contributing to a sudden rise in prices this past Friday. The decreased rig count, however, seems to suggest that oil production will decrease and that a bottom should not be too far away.

The rally came shortly after the Baker Hughes service company reported that the nation’s rig count had dropped by 94, or 7 percent, in the last week, the largest single-week drop since the late 1980s. That leaves 1,223 rigs in operation, the lowest number in three years, and energy executives say another 300 rigs could be decommissioned in the next few months as service contracts expire.

A drop in oil production normally happens several months after rigs are decommissioned, but the Baker Hughes report was another sign that oil companies were responding fast to the global oil glut by cutting their spending.

“My gut says the oil price has been artificially low, and I think this is a logical correction from that overreaction,” said Joel Moser, the chief executive at Aquamarine Investment Partners. “It would not surprise me at all that this may reflect a bottom.”

While I am not positive that oil prices have bottomed, I think we are at least close. Perhaps oil prices touch the high $30s. But I doubt that oil prices could stay in the $30s for an extended period of more than two months. I believe the pain being endured by the oil industry is intense, as evidenced by the dropping rig count. Thus, I expect that oil prices have either bottomed or will soon bottom.


2015 Stock Market Outlook

Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.

As we prepare to enter 2015, financial pundits aplenty will be giving you their forecasts for the upcoming year. People have a tendency to overestimate their confidence when working with ambiguity or uncertainty.

Rather than anchor myself to any pundit, I want to look at what the market is expressing through options. On Friday, December 27, 2014, the SPX closed at 2088.77. Looking at the SPX December 2015 Options (they expire on January 14, 2016) and using thinkorswim’s platform for options, I note the following:

  • about a 90% probability that SPX closes above 1400;
  • about a 90% probability that SPX closes below 2400.

Alternatively, we can state that there is an 80% (=100 – 10 – 10) probability that SPX is between 1400 and 2400. We note the skew to the downside.

Now, let’s look at 80%:

  • about a 80% probability that SPX closes above 1650;
  • about a 80% probability that SPX closes below 2300.

Alternatively, we can state that there is a 60% (=100 – 20 – 20) probability that SPX is between 1650 and 2300. Note again the skew to the downside.

Incidentally, the approximate volatility across different strikes for next December’s SPX options is about 20.4%.

Again, these options expire on a Thursday on January 14, 2016. While this time period is slightly beyond yearend, it’s close enough for government work.

Looking at the first series of numbers, we note that low value of 1400 is about 67% of today’s value and the high value of 2400 is about 15% greater than today’s value. Looking at the next series of numbers, that low value of 1650 is about 79% of today’s value and the high value of 2300 is about 10% greater than today’s value. The downward skew is clearly evident.

If these numbers seem way out there—way too far to even be considered—one can always sell the puts or calls and pocket the “risk-free” money. Me, nothing surprises me anymore, so I don’t consider any potential profits to be risk-free. Put differently, there is no “risk-free” money. While these values might seem far away from today’s values, there can always be surprises that warrant lower or higher values.

How many of us predicted some of today’s geopolitical concerns or the plummet in oil prices? The unknown unknowns can and will surprise us.

How accurate or reliable are these option generated percentages? These percentages are simply based on an option’s pricing model. As prices move throughout the year, the values will change. At present, however, these values represent the market’s view. That view will change. If you disagree, you can always take the other side. But I do find looking at an option pricing model’s values helpful because it reminds me how much volatility and uncertainty exists. It’s too easy to get lulled into thinking into a pessimistic or rosy forecast.

So when you hear or read about some pundit providing a rosy forecast, think back to our exercise. How many pundits are expressing that the market could have a significant retracement? My guess is that most pundits are going to express an opinion of a market rise of somewhere between five and 10%, largely because we’ve enjoyed two strong years. Yet, from the options model’s values we noted the skew to the downside.

The key point from this discussion is to keep an open mind to next year’s potential outcomes.