Kathy would have spotted many short-term trends before she predicted that commodities would crash, and commodities did indeed crash, as lumber prices are already near pre-bubble levels, not only that but arch, invest, etfs have also rebounded, as she predicted following the correction that she also warned about a Couple of months ago, on the other hand, kathy is even better at predicting long-term movements. For example, she spotted the start of the internet in the 1980s before the dot-com bubble and predicted the growth of all five of ark's innovation platforms. Today, kathy wood is back with one of the boldest predictions in her lifetime. In this video, i will cover how kathy thinks that one sector is about to 130 x in size and paved the path for an explosion in several separate sectors.

Welcome to cass news academy, if you're new to the channel, please consider subscribing for more content like this and let's get right into it. Innovation is not a new occurrence and this isn't the first time that new products replaced older ones. As someone who studies, innovation kathy would recognize a pattern with all innovative products, which is the s-curve essentially s-curves, describe the shape of the innovative products from when they are first introduced to when they destroy their old, inefficient counterparts, as demonstrated in this graph. Slow growth occurs when the new product is worse than the old one, but as costs decline and innovation occurs, then growth accelerates before slowing down once again at the beginning of the s-curve.

Not many people recognize the potential of a new product, for example kathy spotted the earliest version of the internet when she looked at industries that no other analyst wanted to look at by design new products initially have a lot of doubters just like how eevees did a Decade ago, the s-curve is an event that has happened many times already with the telephone, electricity, the internet, air conditioners, dishwashers, microwaves and many other products, as curves clearly aren't new to the us or society as a whole. However, kathy thinks that this time it is slightly different, because innovation platforms are converging together to accelerate growth to a whole new level according to arc. Invest the five innovation platforms in our current times are blockchain technology, genome sequencing, robotics, artificial intelligence and energy storage. What you will notice is that not only is each platform replacing old sectors, but the platforms are also merging with each other.

For example, genome sequencing is converging with artificial intelligence and robotics to replace the way we see. Diseases kathy believes that these sectors are going to work with each other to accelerate the pace of each s-curve. It doesn't end there, though, as innovation platforms have to have doubters in the beginning, as i mentioned earlier, in kathy's own words, stocks have to fall through the cracks due to a misunderstanding of, what's going on. An example of this is genomics because not many believe that genomics is our future and rightfully so, as most of us are not genome experts to start with this is all going to tie together very soon.

So this idea of following through cracks was the earliest manifestation of what we're seeing now turbo charged and that's the convergence between and among technologies that is creating one s curve, feeding another feeding another and an explosion in innovation. So the five platforms, i think, a very good example of convergence there. There are many sectors where the current innovation platforms overlap, but there's actually one sector in particular that kathy sees as the epitome of all innovations. That sector is autonomous driving.

You might have some preconceived notions and may even think that autonomous driving is decades away. These types of biases are not a surprise at all. In fact, just like the beginning of all s-curves autonomous driving is worse than us, humans driving, which means that there's slow growth and a lot of doubters, the autonomous driving market as of 2019, is estimated to be valid at 54 billion dollars by 2030 to 2031 kathy Wood believes that this market will be worth 7 trillion dollars in annual revenue, which is almost a 130x increase. So why is she so confident in this prediction? First of all, autonomous vehicles are just becoming better and better.

Every month, the moment when autonomous vehicles are two times better than humans is where the initial fast growth of s-curves begin at. First, not everyone will believe in autonomous driving, but as autonomous vehicles become better and better, the adoption rate on the s-curve will explode. The question shouldn't even be whether autonomous vehicles will become better than humans. Rather, the question is a matter of when autonomous vehicles will be superior to humans, while impressive.

Already the skills of human driving are stagnant and have major flaws, whereas autonomous vehicles are becoming more and more skilled. This is similar to how the internal combustion engine is relatively stagnant, whereas the electric motors becoming cheaper, more efficient and quicker over time. Eventually, evs will reach a nearly full adoption rate. We just don't know when autonomous taxi networks that combines or is the convergence of three platforms.

Robotics autonomous vehicles are energy storage. They will be electric, that's going to be uh, the most cost-effective form of transportation and artificial intelligence. These autonomous vehicles will be powered by artificial intelligence. We think this will be a a seven trillion dollar revenue opportunity in ten years.

Uh, which is bigger than the energy industry, is today, even after this latest price increase, so a huge amount of potential in that space, which is valued at almost nothing right now, many automakers have begun the race to full self-driving with such a large market. Opening up for autonomous driving, not surprisingly kathy, sees tesla as a leader of full self-driving in the u.s note that in kathy's point of view, she thinks that there could be actually other winners in different areas such as in asia or in europe. Tesla is focusing on the united states for full self-driving right now and ultimately, it depends on whether other companies can keep up the pace using lidar, which only works for geofenced areas. We want our companies to be investing aggressively right now and to forgo short-term profits in order to capitalize on some of these winner-take-most opportunities, and we think autonomous taxi networks will submit to natural geographic monopolies and so the those who invest the most aggressively now in artificial Intelligence data collection, robotics expertise, uh software as a service, expertise and, of course, battery technology are going to be the winners uh we think tesla is the winner in in the united states.

That's our bet! Uh. We are taking a close look at cruise automation, which gm owns, uh, waymo, google and so forth. Uh from what we can see what we can discern uh. We think that that tesla is still in the poll position now autonomous driving, isn't the only sector that is likely going to hit mass adoption.

There is one concept in innovation that is extremely important to understand. In physics escape velocity. Is the velocity necessary for an object to escape a planet or object's gravitational attraction? Kathy applies this concept to s-curves. She caused the beginning of stage 2 and an s curve escape velocity, because once the beginning of stage 2 occurs, then the innovative product literally takes off escape velocity typically happens when an innovative product is at 10 to 20 market share, and it just happens that the Pandemic has accelerated many products to the market, share necessary for escape velocity with electric vehicles and e-commerce.

Being two prime examples: in khaki's perspective, evs have benefited tremendously from the pandemic, and sales are about to accelerate faster than analysts are predicting. I think many many people as we went into the coronavirus and were coming out of it uh were very surprised to learn that online retail in the united states was less than 15 of total retail sale because it seemed i mean we're getting boxes every day i Mean i i don't go to stores anymore, the coronavirus uh bumped, that up to about 20 in the united states, i believe electric vehicles, uh sales globally were up 33 percent in a year that gas powered sales vehicle sales were down 10, so that shift is taking Place - and i ironically, i never thought a covid would cause this, but as people decided, they wanted to avoid mass transit and needed another car which we don't think is going to last as as a phenomenon. But as that happened, the shift towards electric accelerated, especially in china, which is offering subsidies, so the the the escape velocity in electric vehicles seems to have been forced earlier than normally would be the case by the coronavirus and by subsidies in china. The world is going to change dramatically as these innovative platforms develop, autonomous driving electric vehicles, artificial intelligence, robotics and genome sequencing are all disrupting a multitude of sectors.

Autonomous driving is disrupting human transport. Electric vehicles are disrupting internal combustion engines. Artificial intelligence is disrupting basic human logic. Analysis and tasks robots are disrupting human labor and, lastly, genome sequencing is disrupting traditional pharmaceutical companies.

Of course, we don't know exactly when these s-curves are going to explode and that's where your decision comes into play. None of this is financial advice, and you should always do your own due diligence and come to your own conclusions. If you're interested in my personal research reports, my buy and sell alerts how i navigate my new twenty five thousand dollar portfolio, which i have a goal of growing to one hundred thousand dollars exclusive valuation spreadsheets in my main portfolio check out my patreon in the first Link down below i'll also leave a link to the full interview i use down below. If you enjoyed this video, please hit that like button and subscribe and i'll see you in the next one.