Opinions on Cathie Wood run strong. “She knows nothing more than anyone else,” one reader all-capped me in an email this past week.
I think value investors have been waiting so long for a momentum-stock comeuppance that some are now trying to remember the moves to their end-zone dances.
“All I have to do is watch the TV for a little while or go on to
Twitter and absolutely I hear it,” Wood tells me. She’s founder and CEO of ARK Investment Management, whose flagship
exchange-traded fund (ticker: ARKK) has lost 50% in a year—and made 250% over the past five years.
If you’re asking me whether you should buy the fund, you shouldn’t. You shouldn’t ask me, I mean. I’m a chicken and the fund is rocket fuel. If you made a Venn diagram of everything Wood has ever bought, and everything that I might be brave enough to consider, you’d find tractor maker
Deere (DE) where the circles overlap.
Many of ARK Innovation’s holdings are wonderful companies trading at valuations that make my knees knock, like
Tesla (TSLA) and
Roku (ROKU). One or two sit at big markdowns but have business models that jangle my nerves, like
Robinhood Markets (HOOD). And then there’s
Grayscale Bitcoin Trust (GBTC), which I like, except for the parts about Bitcoin and trust.
Many investors bought near the top, because they piled in around the end of 2020, when the fund had stuffed the rest of Wall Street into a locker by returning 153%. They seem to be sticking around. Assets under management have plunged from $28 billion to $13 billion, but that’s mostly due to performance, not outflows.
I don’t get all the anti-ARK chest-thumping. Wood has a long record of piling on the risk with big stakes in speculative, ambitiously priced growers, for better or worse.
She shares her thoughts freely online, posting ARK’s investment cases for its holdings. New ones are coming soon…