Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

I'm Not Sure Wood at ARK ETF Knows What "Soul Searching" Really Is

edited January 1 in Fund Discussions
https://bloomberg.com/news/articles/2021-12-09/cathie-wood-says-ark-soul-searching-as-once-stellar-funds-lag?sref=3zYETA5s
The $17.8 billion ARK Innovation ETF has tumbled more than 20% this year, with several of its top holdings like electric-vehicle giant Tesla Inc. and video-streaming platform Roku Inc. down from their peaks. During the same period, the S&P 500 Index climbed about 24%.

“I’ve never been in a market that is up -- has appreciated -- and our strategies are down,” Wood said in a Thursday interview with Bloomberg Television. “That has never happened before.”

Wood says her funds are sticking to their plans even after the rough stretch, and that their models forecast big returns in the next half decade.

“Our strategy is our strategy,” she said. “The opportunity in our strategy is huge right now. We expect a compound annual rate of return of roughly over 40% over the next five years.”

“When we go through a period like this, of course we are going through soul-searching, saying ‘are we missing something?’” she said, adding that in response, Ark has doubled down on its research and modeling.
What does the good book say--pride cometh before...
«134

Comments

  • ...ya...so in the past couple weeks I rec'd back about a 1/4 of my investment in IQDAX, Infinity Q fund...hopefully within the next 2 years after the lawyers and their firms get paid I get another 1/4 back...if I do, I'll consider myself lucky.

    Done learnt an expensive financial investing lesson as my hard lesson was monitized. Alledged fraud by the fund mgr who was "adjusting" the NAVs as he felt was appropriate. Alledgedly.

    I still think at the end of two years our, I will have taken less of a hair cut that this dumpster fire of a fund, ARKK etc. Someone commented several months ago, ya, at least Wood isn't a crook and if you lose money with her you lose it legit. True that but net, net, fraud, inexperience, marketing charlatan...your checking acccount and spending power doesn't know.

    If rates do go up, and personally I think Powell might try and then all kinds of volatility will happen, her funds will really get smacked...who sung the song..."you, ain't seen nothing yet"....BTO? Bachman Turner Overdrive...baby. baby....ya ain't seen nothin'yet....

    Best,

    Baseball Fan

  • edited January 1

    “Our strategy is our strategy,” she said. “The opportunity in our strategy is huge right now.
    We expect a compound annual rate of return of roughly over 40% over the next five years.



    Although the 5 year average annual return (as of 12/31/20) for ARKK was 45.40%,
    it seems improbable that the fund will compound annually at ~40% over the next 5 years.



  • Hope springs eternal.
  • I'm reminded of Rob Arnott's continued holding a 20%+ short S&P position in PAUIX for nearly a decade after the GFC of '08 because of his dogmatic adherence to his 'strategy'. Performance lagged .... significantly.

    Investing should not be dogma; informed adaptability and agility are often good qualities to have.
  • Cathie Wood should confine her "soul-searching" to cleaning out her Kia Soul !
  • edited January 1
    “We expect a compound annual rate of return of roughly over 40% over the next five years.”

    Perhaps her current picks will appreciate by that amount. But - will she have any investors left in her fund by than? Having played around with one of these hot potatos this year (DKNG) all I can say is “Ouch”.

    I used to think gold mining funds were volatile!
  • The estimable Professor Snowball wrote about ARKK in this month's 'Briefly Noted' commentary.

    "Despite a multitude of warnings, here at MFO, at Morningstar, and elsewhere, investors absolutely poured money into the ARKK Innovation ETF in December 2020 and January 2021. The warnings were pretty straightforward: (1) you can’t buy last year’s returns, so don’t let those sway your decisions, (2) ARK was wildly understaffed and inundated (net $20 billion in 2020) with dumb money, and (3) manager Cathy Woods has a consistent long-term boom-and-crash track record, with the boom having just occurred."

    "Good news for investors committing their money on December 1st: you’re only down 13% since then. Less good news for folks who made ARKK one of their New Years 2020 resolutions: you’re down 24%. Folks who gave shares as a Valentine’s Day present? They’re underwater by 39%."
  • @rforno

    +1

    “ Investing should not be dogma; informed adaptability and agility are often good qualities to have.”

    As in all things, my friend!

  • edited January 2
    From Ben Levisohn in this week’s Barron’s:

    “Worse still, despite (ARKK’s) fantastic gains since it was launched in 2014—it has returned more than 340%—its investors have been terrible market timers. They poured billions into the fund during 2020 and the beginning of 2021, driving its flow-weighted price to about $109, according to StoneX strategist Vincent Deluard, or nearly 13% above Thursday's close of $96.70.”

    “Up & Down Wall Street” / Barron’s - January 3, 2022
  • edited January 2
    I'm imagining what the Upside/Downside capture ratio relative to the S&P 500 would have to be over the next five years to deliver a 40% annualized return after the longest bull market in history. You have to believe U.S. stocks are due for another five very strong years or that ARKK is run by the greatest investment genius in history to believe 40% annually is possible for the next five like the last five. And even if it is possible, will investors be able to stomach the volatility along the way or will they time their buys and sales poorly just like they did before?
  • edited January 2
    I’m not hallucinating. Just misread Wood’s words. A total 40% appreciation is possible over 5 years.. 40% annually is totally wacko!
  • edited January 5
    ARKK was off about 3% just before 1:00 PM. Down over 5% YTD. A friend of mine at work years ago used to say, “Off to a roaring halt!” Don’t think he coined that one, but certainly describes the action for ARKK early in the year.

    Part of that cargo, DKNG, is currently flirting with $25, having been around $75 earlier in the year. Suspect it will close below $25. If I were Wood I’d consider tossing that one overboard.
  • hank said:


    Part of that cargo, DKNG, is currently flirting with $25, having been around $75 earlier in the year. Suspect it will close below $25. If I were Wood I’d consider tossing that one overboard.

    I'm sure she will double-down and buy more, because, as usual, she "likes the setup..."
  • "Profitless Technology"

    At what point does this quack cross over into the "unethical behavior" realm causing finanical losses for so many?

    Will she bring the Nasdaq down with her? Do remember that for many of her holdings she holds a double digit % of the float...when it goes down...it really gonna go woosh, no?

    Next stop for ARKK, low-$50's??

    Please note I do not know anything about anything, just posting for entertainment purposes.

    Good Luck to All,

    Baseball Fan
  • Given the history here, I can't think of another investment less Christian than DraftKings, which facilitates gambling addiction. Admittedly, the ETF doesn't have a social or religious mandate, but I wonder how any manager as a religious person squares such an investment with their own personal ideology.
  • edited January 5
    I don't feel that it is any different than investing in casinos or the REIT's that hold them if you prefer. DraftKings just facilitates gambling from ones couch.

    I've also often found that many people who profess or claim to be religious only play that card when it's opportunistic (e.g. see 45).

    Largely I attempt to let neither politics or religious beliefs interfere with investment decisions although sometimes they are extremely difficult to avoid.
  • edited January 5
    Certainly, you are right that such contraditions are hard to avoid. But I do think that there is a difference between investing in a physical casino which someone must visit to get their gambling fix and investing in an online gambling site, which stokes that addiction on your phone or computer and can be accessed anyplace at any time. For an addict, I imagine the temptation becomes inescapable. Yet, many of the casino companies with physical locations are now getting into online gambling, so maybe there's little difference. One vital difference I can think of is DraftKings starves states with physical casinos of important tax revenue: https://news.bloombergtax.com/daily-tax-report/fanduel-draftkings-save-millions-on-taxes-thanks-to-free-play In some respects, the online gambling phenomenon mimics the early days of Amazon when it was killing local businesses in many states and depriving those states of vital sales taxes on each purchase.
  • edited January 5
    I’m not sure how Christianity entered the picture here? Maybe Wood’s religion?

    I can’t see much difference between stopping at a convenience store in Michigan on the way home from work and picking up a 6-pack of beer along with a half-dozen state lottery tickets and than watching the state sponsored “live drawing” on TV that evening, and wagering $5 or $10 online on a sports event you’re viewing at home.

    There are a lot of vices in this world. Gambling is one. And more so when it involves amateur athletes. I agree. But, as think @Mark suggested, you can visit any live casino and bet on a college game just as you would at home. I don’t think @LewisBraham has been in many casinos. I haven’t either. But the few I have been in are highly addictive in atmosphere. The sounds, the flashing lights, the skimpily clad waitresses. All of this is compelling to the addictive personality who tends to stay too long at the bar and run up an excessive betting tab. I avoid live casinos like the plague.

    The online casinos are taxed heavily. I don’t think 100% of it goes to education; but a lot of it does. In fact, it’s the heavy state taxes on profits (50% in NY) that is making it difficult for the online casinos to stay viable. Be careful what you wish for, because that revenue is critical to the government and would need to be made up from other sources.

    Come to think of it … Any one of us can log-in to Fido or Schwab or VG any time, day or night, and place a “bet” on any number of highly speculative stocks, currencies or ARKK-like funds. But, we don’t call it “gambling”. It’s “investing.” :) Yes, the motive and purpose may be more noble - but the addictive nature and potential for great harm are very similar. If you doubt my analogy here, consider the very words that graced the home page of “Fund Alarm“ for many years. It was a line from the Kenny Rogers song: “The Gambler” .
  • edited January 5
    @hank - In an interview of sorts posted a month or two ago on the board her religious beliefs (strong Catholic) were drawn into the conversation as to how the guide her life and he investing business.

    Here's one: God, Money
  • edited January 5
    Indeed, she has stated her Catholic faith has strongly influenced her life and decisions. Moreover, I have been in casinos and know how addictive they are--Ever watch the senior citizens obsessively pulling the levers of the slot machines?--but you physically have to go inside a casino first for that temptation to work. How much easier it is to give in to that temptation via your smart phone or computer? The Internet makes everything easier and increases the consumption levels of tempting things--online trading versus calling your broker for instance, pornography, shopping, etc. If this weren't the case, DraftKings wouldn't have been a hot stock in the first place.
  • edited January 5
    Thanks guys for clarifying the Christianity question.

    I’m sympathetic to Lewis’ point of view too. I’m sure many will succumb to temptation and squander precious money needed for food and shelter on these online apps. Probably some I know and care about. Wonder what other “unsavory” businesses Wood’s invested in? To be honest, I’m a bit worried about her. Must be a tough row to hoe about now.
  • I always thought you guys were harsh on her but anybody that uses their faith / religion, however remotely it may be, to peddle their game has to be the biggest con in the world. I am not saying she is a con artist but that is what con artists do and Madoff used it very effectively. I think faith / religion should be limited to family dinner table and best not mixed with business or in a discussion on an investment forum.
  • M* charts show that MSEGX (Morgan Stanley Inst Growth fund) is down nearly 30% but stock charts show it is down 25% from its recent high on November 16. Either way, it is in a bear market. I think there are other MS funds that are more aggressive growth funds than MSEGX. So, it is not just ARKK losing money.
  • I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.
  • msf
    edited January 6
    BaluBalu said:

    M* charts show that MSEGX (Morgan Stanley Inst Growth fund) is down nearly 30% but stock charts show it is down 25% from its recent high on November 16.

    To no great surprise, the discrepancy dates to Dec 15, when a cap gain of $18.005 (per Yahoo) was distributed. The price on Dec 10 (Fri) was $89.20, and the price on Dec 13, post div, was $69.57. Back of the envelope [($69.57 + $18)/$89.20] says the fund lost about 1.8%. That's what M* says. Stockcharts reports a gain of 4.4%.

    The Morgan Stanley site shows the divs, but doesn't yet report the true gain for December.
    https://www.morganstanley.com/im/en-us/registered-investment-advisor/product-and-performance/mutual-funds/us-equity/growth-portfolio.shareClass.A.html

    The $18.005 div bought 0.2588 shares at the ex-dive price of $69.57. Perhaps Stockchart took those shares and valued them at the old price of $89.20, coming up with a "new distribution" of $23.085.

    Now the same calculation as before, using this new distribution amount, comes to:
    ($69.57 + 23.09)/$89.20 = 1.038%, or a 3.8% increase. Not all the way up to 4.4%, but that's all I can coax out of bad arithmetic.
  • @msf yes thought it was likely a CG issue. I sold post div. Found this Jan 2021 article informative on the topic of Funds/ETF's that soar more than 100% in a given year: https://www.morningstar.com/articles/1017292/what-to-expect-from-funds-after-they-gain-100-or-more-in-a-year-trouble-mostly
  • edited January 6
    wxman123 said:

    I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

    Just curious, when did you start buying ARKK and ARKG? Is it for a trade or a long term portfolio holding?

    I did buy a little bit of ARKK yesterday. I am not putting any money into ARKK that I can not afford to lose. This is not Cathy's first rodeo but I do not see any trophies from past rodeos.
  • edited January 6
    I am still trying to get acquainted with MFO. I received a notification, which is not for a personal message or for activity related to any thread I have bookmarked or started. I could not figure out what this notification relates. After some confusion, I figured out that it is a public messages (see below). "To "post a public message" on someone's profile (Activity Wall), choose add comment."

    Not sure why a public message feature is in MFO and how it is meant to be used - what is easy for me to understand is, if one likes to send a private message, send a private message; otherwise, post it in a thread you would like to comment.

    "davidrmoran → BaluBalu
    about big drops, you do know about distributions, right? (honest question)"

    I have no clue what the above public message is about but since this thread has my recent activity, I am posting here.

    I did not expect both M* and Stock Charts to screw up accounting of YE distribution in their total return charts. I have seen before M* screw up YE distribution accounting and so cross checked with Stock Charts and assumed the difference probably relates to a distribution. Is Davidrmoran suggesting that the 25% drop in total return by Stock Charts measure is also largely explained by year end distribution and thus Stock Charts is also wrong by a big magnitude?

    P.S.: Some of the mistakes in M* charts do not ever get corrected - not sure why. I expected with the passage of time, machine mistakes get fixed but looks like evidence does not bear my expectation. I use M* for charts (usually cross check with Stock Charts) and for my personal portfolio tracking. I found a lot of mistakes in the portfolio tracking tool and accepted to live with it.
  • my bad for not marking it private !

    apologies
  • BaluBalu said:

    wxman123 said:

    I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

    Just curious, when did you start buying ARKK and ARKG? Is it for a trade or a long term portfolio holding?

    I did buy a little bit of ARKK yesterday. I am not putting any money into ARKK that I can not afford to lose. This is not Cathy's first rodeo but I do not see any trophies from past rodeos.
    Long term, first buys June 2020. Even in ARKK. Down 8% in ARKG. buying only the big dips. I think this will work out over time, or at least do better than the broad market.
Sign In or Register to comment.