We became extremely bearish on energy in 2011. At the time, we saw interest in Seattle for hybrid and electric cars. This convinced us that 10% of the cars on the road nationwide might be hybrid and electric by 2020. In actuality, only 2% of total unit sales in the U.S. were electric vehicles over the last ten years. We also felt back then that the enthusiasm among investors for emerging markets/China was overblown and would cause oil demand forecasts to fall short of expectations.
It turns out we were wrong, because we were too early in our prediction. It wasn’t until 2016, and then more recently with the COVID-19 lockdowns in 2020, that oil prices declined steeply. From the summer of 2014 to the summer of 2019, we benefited from having no participation in the energy sector.
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