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another question given that our strategy from our our strategies from their peaks have dropped anywhere from 60 to 80 percent uh since February of 21. so this has been almost two years um why do we not turn defensive like most managers are doing well um there's a very important explanation for that we do one thing we do not pretend to be an asset allocator we are our our research and our our investment Investments are centered on disruptive innovation and so uh when advisors and individuals choose our strategy they're not choosing it alone they have more Diversified portfolios of course including real estate uh the biggest uh asset most consumers have is is housing so we are one part of an Investment Portfolio and uh therefore we would uh never be uh using cash we would expect advisors and individuals uh to to basically raise cash and segregate it from their investment portfolios in terms of our strategies we during downturns concentrate towards our highest conviction names and so we've been doing that now for uh nearly two years and the history history would suggest that that concentration strategy plays out very well in the subsequent rebounds and we do think this rebound will be quite powerful this year has been the most difficult year of my career worse than 0809 line and I would venture to say that it has been the most difficult year of many in investors career careers the only thing that worked this year was energy it's up almost 50 percent uh and many people are asking us why don't we diversify into energy since it's working well the reason for that is we think it will stop working if our forecasts for electric vehicles and autonomous taxi platforms are correct then oil demand could drop by roughly 30 percent 30 million barrels a day during the next five to ten years and we believe that demand Destruction has already started it looks like oil demand peaked in 2019 and we're still in the process of uh peeking out I would say in 100 million barrels per day range but we think the resolution of that basing period here is going to be down so we wouldn't be investing in energy and we think the indexes that have rebalanced and now are including more energy uh are are mistaken and those Investments That rebalancing will not work out uh now another question you have been buying more Tesla and other stocks during the downturn uh and and yet the prices have fallen further and our performance decline has worsened with interest rates and prices fluctuating so widely and in in this case they probably mean increasing will an investment focus on Innovation work well we believe that the leading indicator correctly is inflation and it it has peaked the inflation rate has peaked uh almost uh every measure of inflation has peaked uh most of those uh metrics peaking out in March or June of this year and the first or the second quarter so typically that's a a good thing for Innovation but as I just mentioned I think the market is so skittish and has been so terrorized by the most rapid increase in interest rates ever we have never seen an 18-fold increase in interest rates within one year it has truly terrorized the markets and I think that the fear is palpable in fact I think according to the Bank of America um surveys recent surveys of fund managers and advisors is probably the advisors we haven't seen this amount of cash on on the sidelines since I I think it was 2006 and maybe even 2001.
I do know also the same survey shows that the put to call ratio in the U.S market meaning those short relative to those long put calls is at 1.5 now and it has not been that high since 2001. so we have an incredible amount of fear in the market and that actually is the best time to average into these markets I remember in late 20 early 21 we could do no wrong anything we said was a gospel at the time and and I knew that that wasn't right and at the time remember I remember saying keep some powder dry it is for these moments or averaging down throughout a period like this that one keeps the powder dry this period side of the late 90s the late 90s was an irrational uh increase in tech stocks uh appreciation in tech stocks and it was incorrect the Technologies were not ready and even if they were close to being ready uh the the um costs were way too high so Technology's not ready we didn't get the cloud till 2006.
we didn't get the big breakthrough in AI deep learning until 2012 the cost for DNA sequencing 2.7 billion for one genome back in 2003. that number is down to 500 now we are ready for prime time and yet investors are doing the opposite of what they did during the late 90s they're running away running for the hills running for their benchmarks and we think that innovation is going to pose a problem for the benchmark
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