The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: gutts on February 19, 2018, 11:23:29 PM
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Hey folks,
I have at least several years before I can push the big red rat race escape button. I am going to exercise a more aggressive investing approach. Already converted VFFVX to VFIAX (Vanguard SP500 Index) in my 401K and I don't really feel any urge to keep adding VTSAX on top of that. So, I am considering to buy something else, with higher potential risk/reward ratio. I've been watching ARKK and ARKW for 3 months now and I really like both ETFs:
https://ark-funds.com/arkw
https://ark-funds.com/arkk
As for ARKW, I put a lot of faith in the cloud technologies. I would also like to add ARKK just to have exposure to a larger hi-tech blend.
However, I am a bit concerned about the trading volumes of these ETFs. No one gave a damn thing about both until May 2017 and then suddenly the daily volumes spiked to the moon. There are even bigger spikes started in Nov, 2017. Both are 50+% Institutional owned. The fees suck but last year performance was crazy however I feel like it might have been the accumulation process...
So, does anyone hold any of them? Any thoughts?
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I currently hold ARKK.
I got into it in sort of a roundabout way... I wanted more exposure to 3D printing so I bought into two of their other. ETFs, PRNT and ARKQ. PRNT wasn't doing as well as I liked and the more I thought about it, I figured there's a lot of overlap between the 2. The other thing is that ARKK tries to cover multiple types of innovation, while ARKW, ARKQ, and the other one I can't think of at the moment are more focused, and of the three sectors, I really don't know which one is going to perform best over the long term.
So about a month ago I sold off my PRNT and ARKQ and bought into ARKK. This was right before the recent drop, but I'm planning on a long term holding so I'm not that worried about it.
I'd say if you think one sector is going to outperform the others, then buy into that sector. If you want to hedge your bets a bit, ARKK may be a better choice (and I think they cherry pick off of the sector-specific funds to get their performance to date).
As to the expense ratio, I don't worry about it all that much. Yeah it's high when compared to pretty much anything from Vanguard, but it's baked into the ticker price, so to me it's out of sight/out of mind.
One thing I don't like about ARK's ETFs is there's no way to automatically reinvest the distributions (at least when held in a Vanguard brokerage account). I haven't totally figured out what I'm going to do with them, but am leaning towards manually adding them to my main Vanguard index fund holding.
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Thank you for your insight! I do believe in the bright future for the cloud, however, the market is still overpriced currently, so there is no guarantee that the bubble won't explode. Anyway, I wanted to invest more aggressively and shoot for a higher risk/reward ratio. You pay for what you get =). So, yeah, ARKW+ARKK to have more exposure. I am gonna use Robinhood instead of Vanguard to hold ETFs, because it has no fees and I am in love with their mobile app. And actually, having no fees solves the problem with distributions as it opens possibilities to add smaller amounts of stocks/ETFs to your portfolio at no cost.
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Has anyone been purchasing lately?
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Has anyone been purchasing lately?
I have been loading up ARKW, and it's been paying pretty well.
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After the Spring crash, I started looking for better ETFs to invest in besides VTI. I discovered ARK Funds and Invesco's TAN solar energy ETF. I nervously watched them for a couple of months, thinking that there might be a second crash. I finally decided to buy some ARKW on 6/29/20 for $81.75 per share. It kept climbing quickly, so I decided to try all of the other ARK ETFs and began buying on 7/6/20 and also purchased some VGT on the same day for comparison.
Here are the gains as of today 2/4/21:
VGT 29.6%
ARKW 87
ARKK 89
ARKF 66
ARKG 95
ARKQ 89
I finally began buying TAN on 8/5/20 It has gained 126%
I recently realized that Invesco has another alternative energy ETF "PBW" which has performed slightly better than TAN has. I started buying it on 12/25/20 and it's already gained 19.4%
The last lots of ARK that I purchased were ARKQ on 12/15/20, ARKG on 12/29/20, and ARKF on 1/4/21.
I gave my daughter some money to invest around the first of the year. I helped her register with Vanguard and choose some ETFs. She chose ARKG, ARKQ, ARKK, TAN, PBW, & QQQM on 1/8/21. It just happened to be a terrible day to get into the market.... Her account has been negative for many of the days since then, but is finally up 2.94% overall today. Her TAN holding is still down 3.4%.
She's still in college and I wanted to get her interested in investing & following the market. I figure it will be easier for her to "see" the value of saving and investing if she has some seed money to follow. Since I have the same funds it's something we can follow together & chat about.
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Just traded 10% of my net worth for equal parts VGT/VHT/ARKK by selling VTSAX around new year. I like the vision of Kathy Woods, I hope what she believes is true. At first I balked at the fees, but after reading a bit of ERE I feel better about investing in a fund manager that shares your values. If nothing else she has attracted billions to invest in cutting edge technology which I think is overall positive.
Also sold another 10% worth and picked up some small cap value last spring. Part of an overall strategy of having more tilts / asset categories to rebalance between. Either to decrease volatility or for my own entertainment, can’t tell which yet :)
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I buy ARK funds weekly like I buy VTSAX, just not as much of an allocation.
A friend who was early into Telsa told me about ARK last year and ARKK as an opportunity to get some TSLA exposure. I started buying ARKK around $67, so I'm a fan. I have much smaller holdings in their other funds, with ARKF as my second largest holding in ARK. Yes it costs more, but the gains have covered that. They also had a capitol gains payout in December which I wasn't expecting and was really some icing on an already good cake.
I'm well aware this rocketship could come crashing back to earth, but I also feel that ARK funds is like any other investment broker out there and is filling a lucrative void in the current investment environment. YMMV.
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Hmm, given it's up 4x+ since March, is it too late to get in? Have the gains mostly been had this last year? Anyone buying in first-time - would love to get a second opinion.
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Hmm, given it's up 4x+ since March, is it too late to get in? Have the gains mostly been had this last year? Anyone buying in first-time - would love to get a second opinion.
Well, if it hits $200 in 2021, will you think that then is a good time to get in, or now was better?
No one can really answer this question except you. It's up to you as an investor, to decide if that decision is correct for you and your situation, or not based preferably upon your personal research and not what others say on an internet forum.
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I read that ARK is quickly becoming the largest holder of several stocks. If stocks rise and fall based on the sentiments of (guessing here) 10%(?) 5%(?) of the available float then ARK is pushing up the stock values of some of their portfolio. This is the making of a bubble or at least an over valuatiion that will correct harshly.
With highly, very highly, recommend that anyone who holds this ETF package use a stop loss order to lock in your profits. I'm not saying sell but after a run up like the ARK funds have had, its wise to lock in your profit. Others might have better advice than me on how to do that but if you've had a 40 or 80% run up, a 15% trailing stop might be reasonable. I tend to have tighter stops for my own reasons. I haven't quite figured out the alchemy so do your own research but... please do lock in your profits.
Some history... many years ago an investment guru, Frank Mersch ran a resource mutual fund with a company called Altamira. Once the fund became famous for its amazing run up under Frank's guidance, it made the news and I bought some. I got in too late and rode it down for a while. There is nothing in the ARK story that tells me this will end differently. The ONLY question I have is... WHEN will it plateau and then tank.
Use stops.
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I just noticed that ARK's 3-D printing fund, PRNT, which never gets mentioned has been on fire. +39.29 YTD
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Has anyone been purchasing lately?
I read that a year ago ARK Invest (the company) had $3 billion assets under management, and they now have $50 billion.
It may help to peek at what the companies are buying. Both ARKK and ARKW have Tesla as their top holding, at 10% of assets in both funds.
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I've been buying ARK fund options (on Etrade) and it's been quite lucrative. Also PRNT and IZRL options. I recently sold (closed) all of the ARK holdings with Tesla as I thought there might be a Tesla bubble. I'm sure I'll be buying ARK options for years to come.
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I've been watching ARKK and ARKW for 3 months now and I really like both ETFs:
Would you be interested in them, or would your screening technique have found them, if they had not gone up 300% in the past 11 months and they were not all over the financial media?
Bear in mind that even buying Amazon.com - arguably the best stock market pick of the past 2 decades - in March of 1999 for $86 would have been followed by a loss of 93% over the next 2.5 years.
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I read that ARK is quickly becoming the largest holder of several stocks. If stocks rise and fall based on the sentiments of (guessing here) 10%(?) 5%(?) of the available float then ARK is pushing up the stock values of some of their portfolio. This is the making of a bubble or at least an over valuatiion that will correct harshly.
With highly, very highly, recommend that anyone who holds this ETF package use a stop loss order to lock in your profits. I'm not saying sell but after a run up like the ARK funds have had, its wise to lock in your profit. Others might have better advice than me on how to do that but if you've had a 40 or 80% run up, a 15% trailing stop might be reasonable. I tend to have tighter stops for my own reasons. I haven't quite figured out the alchemy so do your own research but... please do lock in your profits.
Some history... many years ago an investment guru, Frank Mersch ran a resource mutual fund with a company called Altamira. Once the fund became famous for its amazing run up under Frank's guidance, it made the news and I bought some. I got in too late and rode it down for a while. There is nothing in the ARK story that tells me this will end differently. The ONLY question I have is... WHEN will it plateau and then tank.
Use stops.
Couple of points:
1. The Ark funds are supposed to have no more than 10% of their assets in 1 company, so I would expect if that one company grows much faster than the others to become, say 15% of the assets, the fund should be selling off that company and buying something else to keep within that 10%. I don’t know how frequently they check for this though (daily, weekly, monthly, quarterly, etc).
2. The Ark funds are supposed to be investing in innovation. Once it looks like a technology has matured, they’re supposed to divest and look for the company that’s going to make the next big advance.
Expect their growth to be uneven over time. There’ll be times where the technology is being developed and the related stocks will be treading water (or drowning), and other times where the technology is finally ready for market and lots of people think they have to have it, and the related stocks explode.
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I have them all in my M1 taxable account. So far they are the 2nd best performers behind MSTR. I am for the most part a terrible stock picker and get nervous and sell at the wrong times and cannot stop tinkering. Realized some time ago that Cathy and crew do it much better then I and I will gladly pay them for the service. I tried being a value investor for over 10 years and got crushed over and over and over again. I have given up and joined the heard and sticking with innovation in my taxable account as I am tired of seeing everyone around me get rich while my portfolio stayed stagnant. I'm sure it will crash now that I have capitulated.
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I read that ARK is quickly becoming the largest holder of several stocks. If stocks rise and fall based on the sentiments of (guessing here) 10%(?) 5%(?) of the available float then ARK is pushing up the stock values of some of their portfolio. This is the making of a bubble or at least an over valuatiion that will correct harshly.
With highly, very highly, recommend that anyone who holds this ETF package use a stop loss order to lock in your profits. I'm not saying sell but after a run up like the ARK funds have had, its wise to lock in your profit. Others might have better advice than me on how to do that but if you've had a 40 or 80% run up, a 15% trailing stop might be reasonable. I tend to have tighter stops for my own reasons. I haven't quite figured out the alchemy so do your own research but... please do lock in your profits.
Some history... many years ago an investment guru, Frank Mersch ran a resource mutual fund with a company called Altamira. Once the fund became famous for its amazing run up under Frank's guidance, it made the news and I bought some. I got in too late and rode it down for a while. There is nothing in the ARK story that tells me this will end differently. The ONLY question I have is... WHEN will it plateau and then tank.
Use stops.
Couple of points:
1. The Ark funds are supposed to have no more than 10% of their assets in 1 company, so I would expect if that one company grows much faster than the others to become, say 15% of the assets, the fund should be selling off that company and buying something else to keep within that 10%. I don’t know how frequently they check for this though (daily, weekly, monthly, quarterly, etc).
Yes, no particular stock can make up more than 10% of an ETFs market cap.
ARK has been re-balancing TSLA a lot of the past year and a half as you can imagine. Every time they make a sale to re-balance, some dolt on twitter screams out "Look!! ARK is getting out of TSLA, they sold x-thousands of shares!" They re-balance regularly.
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Not sure what to think about ARKK right now...anyone buying the lows?
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I bought some ARKK in Q3 and early Q4 2020. I bought a little under the amount to equal 1% of my liquid investment accounts. I won't buy any more. I probably won't sell any. This is a bit out of my comfort zone, but with that amount, it won't make any difference.
6 years ago I bought a similar amount of PNQI, the Internet ETF. That is 3.5 times what I paid for it currently. I kept these amounts low, so in the event they got too large, I would be tempted to sell some to rebalance and thus incur LTCG. I am here to buy, not to sell. I have 5 years living expenses in the credit union. I may be 71 next month.
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I'm confused by ARK Next Generation Internet ETF (ARKW):
"The stated goal of ARKW is to invest in companies that are poised to profit from advances in cloud computing, e-commerce, big data, artificial intelligence, mobile technology, social platforms and financial technology. The fund’s biggest holdings include familiar names like Tesla, Square, Amazon and Roku, as well as lesser-known firms like Splunk and 2U."
https://etfdb.com/etf/ARKW/#etf-ticker-profile
Despite Tesla's share price drop, it's still the largest holding by far:
https://etfdb.com/etf/ARKW/#holdings
I don't follow why Tesla is next generation internet.
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Tesla checks the boxes; AI & mobile technology. Perhaps also big data and financial technology with the bitcoin splurge.
I'm not a TSLA bull, so I can't give the breakdown on the how and why.
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Not sure what to think about ARKK right now...anyone buying the lows?
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lol.. you wish
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Not sure what to think about ARKK right now...anyone buying the lows?
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lol.. you wish
?
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Not sure what to think about ARKK right now...anyone buying the lows?
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On strength , in my fun 2% portfolio I have been shorting ARKK. I dont recommend shorting anything to anyone unless its something you know and have been doing but at least for now I think with all the EV's coming to Market and the buying of so many high flyers the fund has a higher chance of downside than upside. Way to much Tesla for sure. But thats just my opinion and why I only play around with a 1-2% of my total portfolio. The funds have had a great run and we have seen these type of funds over many many years and they usually dont end well. Maybe it will be different this time. Indexing takes alot of that fear away.
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Not sure what to think about ARKK right now...anyone buying the lows?
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On strength , in my fun 2% portfolio I have been shorting ARKK. I dont recommend shorting anything to anyone unless its something you know and have been doing but at least for now I think with all the EV's coming to Market and the buying of so many high flyers the fund has a higher chance of downside than upside. Way to much Tesla for sure. But thats just my opinion and why I only play around with a 1-2% of my total portfolio. The funds have had a great run and we have seen these type of funds over many many years and they usually dont end well. Maybe it will be different this time. Indexing takes alot of that fear away.
Big up day today for ARKK; up 4.8% vs. market at 2% up. Are you going short any today?
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These funds could essily get cut by three quarters imo.
Those recently piling in are the "buy the top" crowd who 12 months ago had never even heard of Cathie Wood.
Ask yourself do you really want to be buying with them? Suggest you google Janus fund for a lesson from history
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Not sure what to think about ARKK right now...anyone buying the lows?
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On strength , in my fun 2% portfolio I have been shorting ARKK. I dont recommend shorting anything to anyone unless its something you know and have been doing but at least for now I think with all the EV's coming to Market and the buying of so many high flyers the fund has a higher chance of downside than upside. Way to much Tesla for sure. But thats just my opinion and why I only play around with a 1-2% of my total portfolio. The funds have had a great run and we have seen these type of funds over many many years and they usually dont end well. Maybe it will be different this time. Indexing takes alot of that fear away.
Big up day today for ARKK; up 4.8% vs. market at 2% up. Are you going short any today?
Been in and out of the short and have done well. The outflows of the fund have been staggering as well. I would not be in these funds right now that is just my .02$ Dont take my word for it do your own homework
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Yes, inflows and outflows into ETFs can have a very pronounced effect on the price. The ETF structure means they have to put new money to work, they can't hold it in cash, so as new money comes in they have to buy buy buy at the prevailing market price, which creates a virtuous loop. But then when people want to pull their money out they have to sell sell sell to meet redemptions which creates a negative loop.
this is why I much prefer closed ended active funds.
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I have them all in my M1 taxable account. So far they are the 2nd best performers behind MSTR. I am for the most part a terrible stock picker and get nervous and sell at the wrong times and cannot stop tinkering. Realized some time ago that Cathy and crew do it much better then I and I will gladly pay them for the service. I tried being a value investor for over 10 years and got crushed over and over and over again. I have given up and joined the heard and sticking with innovation in my taxable account as I am tired of seeing everyone around me get rich while my portfolio stayed stagnant. I'm sure it will crash now that I have capitulated.
Without wishing to be unkind to @effigy98 , I think this post will mark the high watermark of the "Tech is the future, value is dead" trade, and the next few years will see a lot of mean reversion.
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Been in and out of the short and have done well. The outflows of the fund have been staggering as well. I would not be in these funds right now that is just my .02$ Dont take my word for it do your own homework
Excellent! Well done.
As long as US Treasury yields are rising (currently 1.47%, up from sub 1%) then growth stocks will not perform well. Thus you have got an 'all-clear' signal to short all ARK funds to your heart's content since they're growth only.
Question: why not just buy puts instead of shorting?
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Yes, inflows and outflows into ETFs can have a very pronounced effect on the price. The ETF structure means they have to put new money to work, they can't hold it in cash, so as new money comes in they have to buy buy buy at the prevailing market price, which creates a virtuous loop. But then when people want to pull their money out they have to sell sell sell to meet redemptions which creates a negative loop.
this is why I much prefer closed ended active funds.
ETF managers generally are aware of this also and have a work-around in place.
Most ETF's will have a large cap or two (or three) in the fund that at first glance might look out of place. I'm thinking of AAPL, GOOG, AMZN, or even MSFT or something along those lines. These stocks serve as a sink for cash and that's why they're in the fund. Thus, they hold little cash but can still be fully invested in stocks that are serving as a cash proxy. Thus, the loops are mitigated, if not broken.
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I have them all in my M1 taxable account. So far they are the 2nd best performers behind MSTR. I am for the most part a terrible stock picker and get nervous and sell at the wrong times and cannot stop tinkering. Realized some time ago that Cathy and crew do it much better then I and I will gladly pay them for the service. I tried being a value investor for over 10 years and got crushed over and over and over again. I have given up and joined the heard and sticking with innovation in my taxable account as I am tired of seeing everyone around me get rich while my portfolio stayed stagnant. I'm sure it will crash now that I have capitulated.
Without wishing to be unkind to @effigy98 , I think this post will mark the high watermark of the "Tech is the future, value is dead" trade, and the next few years will see a lot of mean reversion.
Agreed. The reversion has already started.
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Last year a lot of tech stocks benefitted from a surge in stay at home internet use. The problem is most people bought after that performance, and they're unlikely to see a repeat this year. This year, if Covid-19 recovery comes to fruition, you'll have huge numbers of people stopped from traveling for over a year, all of whom will want to travel at about the same time. So in my view, there's a combination of people chasing performance in tech stocks (when 2021 isn't 2020), and a surge in getting away from home.
I'm biased in that most of my portfolio is tied up waiting for the recovery. So maybe that causes me to see things from the perspective of someone who is not buying tech stocks until a recovery is almost complete - hopefully in a few months.
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Been in and out of the short and have done well. The outflows of the fund have been staggering as well. I would not be in these funds right now that is just my .02$ Dont take my word for it do your own homework
Excellent! Well done.
As long as US Treasury yields are rising (currently 1.47%, up from sub 1%) then growth stocks will not perform well. Thus you have got an 'all-clear' signal to short all ARK funds to your heart's content since they're growth only.
Question: why not just buy puts instead of shorting?
I never short Equites to be honest. I just buy long, averaging always BUT on the very rare occasion if I just think something stinks I will short it. And that is so slim. I dont know the first thing about Puts and I like getting in and out as I dont feel even comfortable shorting. But I have seen things like this before and I really think her ETF's are going to be in trouble-
Good Stuff From The Bear Cave Letter on Ark Invest
Potential Liquidity Issues at ARK Invest
- Bad Performance Might Expose a Liquidity Problem
"We love a wall of worry. We saw it on social media, lot of chatter, some of it just waiting for our fund in particular to take a tumble, maybe to buy and some happy to sell and short and all that."On February 16, The Bear Cave highlighted potential liquidity issues at ARK Invest, the hot active ETF firm founded by Cathie Wood that has seen assets grow from around $10 billion to $60 billion over the last 12 months. On February 23, The Bear Cave reiterated liquidity concerns about ARK Invest. Later that day, Cathie Wood said,
ARK's flagship Innovation ETF is now down 20% from its highs and is beginning to face outflows. The illiquidity risks are serious and worsening.
ARK's illiquid holdings are problematic because as ARK faces redemptions, hedge funds could take predatory short positions in ARK's illiquid holdings and create a performance death spiral. A review of ARK's illiquid holdings shows that could be happening:
(Ownership data from Bloomberg as of February 13.)
How bad can it get?
Copper River Capital provides an example of what large forced transactions can do to markets. In September 2008 the short-focused fund faced margin calls after Goldman deemed its cash held at Lehman Brothers invalid. The firm was forced to cover large short positions quickly and drove positions upwards of 40% against themselves within days. Part of the short-term upwards jerk was hedge funds front-running with their buying.
(Source: "Anger at Goldman Still Simmers" from NYT)
Replace margin calls with forced selling, and you could have the same thing happen in reverse with ARK. What makes ARK's situation potentially worse is the heavy retail participation in many of its names. Retail investors may be fickler and have price drive sentiment. As a result, any declines in ARK's illiquid names may drive copycat selling by retail traders playing with momentum.
In addition, Bloomberg recently reported that Nikko Asset Management, a Japanese firm, copies many of ARKs strategies for Japanese investors. This makes ARK's illiquidity even bigger than it seems. For example, when accounting for the shares owned by Nikko, ARK + Nikko own "at least 25% of three firms" according to Bloomberg.
In a YouTube video last Friday (February 26) Cathie Wood addressed some of the illiquidity concerns and said:
"There is a misunderstanding of illiquidity when it comes to ETFs..." (33:38)
"As a portfolio manager, I know the difference between an ETF wrapper and a mutual fund wrapper. A portfolio manager in the ETF does not need to worry about flows..." (36:23)
"I have been surprised by some of the ETF commentators. They should know better, but they haven't managed money..." (37:31)
Ms. Wood highlighted that ETFs have different inflow and outflow structures than mutual funds. ETFs grow and shrink as authorized participants create or redeem shares of the ETF. If an ETF trades below NAV, an authorized participant can buy the ETF, generally convert the ETF into the underlying holdings, and then sell the holdings. This helps the ETF trade up to NAV, but it does not change the selling pressure in illiquid names. Read more on the ETF creation/redemption process here and here.
ARK Invest sends daily emails to investors with its ETF trading activity. On Friday, February 26, ARK Invest expanded its disclaimer to 718 words compared to 163 words on Thursday, February 25. Below are two new additions:
"Additional risks of investing in ARK ETFs include market, management, concentration and non-diversification risks."
"There can be no guarantee that an active trading market for ETF shares will develop or be maintained, or that their listing will continue or remain unchanged."
In Friday's daily trade email ARK also disclosed increasing its stakes in Repare Therapeutics (NASDAQ: RPTX), a $1.2 billion drug company, Vuzix (NASDAQ: VUZI), a $1 billion tech company, and Atlas Crest Investment (NYSE: ACIC), a $600 million SPAC.
Short-sellers appear to smell trouble brewing. According to one trader, the borrow rate on ARK's Innovation ETF (ARKK) reached 19% yesterday.
Reddit traders are raising alarms too. One post titled, "Investors beware: $ARKK is a liquidity disaster waiting to happen" was upvoted over three thousand times. It read:
"I ran an analysis on the weekly net flows into ARKK over the last 60 weeks, and found that portfolio performance of the ETF was highly correlated with ETF inflows... lack of liquidity becomes a much bigger problem when investors are selling and when the broad equity/tech markets have a correction... I am concerned that many people may not be aware of these risks, and unfortunately the small investors in Cathie's funds will be the ones who bear the brunt of any crisis."
A separate post in the WallStreetBets subreddit titled, "The Real Big Short: Passive Investing, Positive Feedback Loops, and The Massive Ark Bubble" recommended buying ARKK puts.
ARK Invest derives its name from the Ark of the Covenant, a gold chest that contained the Ten Commandments, according to an interview Ms. Wood did with the Christian website Jesus Calling. In that interview, Ms. Wood reflected on her prayers during the tough early days of ARK and said,
"And I would kneel down and say, 'Okay, God, You're in control. Even if this company fails, I know I've done the right thing. This is a walk of faith for me. Your will be done.'"
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If you like ARK you might also be interested in MOON (https://www.direxion.com/product/moonshot-innovators-etf). I don't currently have either but I'm interested in both.
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Just talking to my neighbor who is very successful and represents a large firm . He was just saying that all reps received an email to encourage there clients to get out of the ARK funds.
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Just talking to my neighbor who is very successful and represents a large firm . He was just saying that all reps received an email to encourage there clients to get out of the ARK funds.
Sounds like it’s time to buy.
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Just talking to my neighbor who is very successful and represents a large firm . He was just saying that all reps received an email to encourage there clients to get out of the ARK funds.
Sounds like it’s time to buy.
If you believe it can support the outflows. Bit different then blood in the water on Stocks vs and ETF. That is why Funds are dropping it. Personally I think and hope it will be fine , dont want to see anyone get burned BUT its had a great run and a whole lot of High Flyers, not for me.
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ARK Invest derives its name from the Ark of the Covenant, a gold chest that contained the Ten Commandments, according to an interview Ms. Wood did with the Christian website Jesus Calling. In that interview, Ms. Wood reflected on her prayers during the tough early days of ARK and said,
"And I would kneel down and say, 'Okay, God, You're in control. Even if this company fails, I know I've done the right thing. This is a walk of faith for me. Your will be done.'"
ARK holders are going to have to show a lot of FAITH to withstand the rollercoaster they're about to endure. My guess is that in 12 months time we're going to look back and say "how could I be so dumb as to buy this after its already run up 500%"
Here in the UK we have a similar fund, Scottish Mortgage Trust SMT.L which has been the top performing fund, heavily invested in the likes of TSLA and NIO. It's now lost 1/3rd of its price from its peak just a month ago.
My expectation is that a lot of people who have jumped on board and cost averaged up are going to be sent scurrying when they see an overall loss on their holdings. Although in SMT's case, I do think they have a bit of good sense about them to know when to take some money off the table, having recently halved their holding in Telsa, as opposed to Cathie Wood who just "bought a lot more".
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Mar 08, 2021 | 09:02 AM
Wooda, Shoulda, Coulda!
* ARK is this generation's template for growth investing (over value investing) and, like Robinhood, is the standard bearer for the democratization of our markets and market participation
* With the pivot moving to value (see chart below) ARKK shares (and that of the other ARK Invest ETFs) remain vulnerable in price
* Watch ARK Invest's fund outflows for a sign of more weakness as the virtuous cycle transforms into a possible vicious
Woulda, shoulda, coulda is an expression of dismissiveness or disappointment concerning a statement, question, explanation, course of action, or occurrence involving hypothetical possibilities, uncertain facts, or missed opportunities.
Which gets us back to Cathie Wood's ARK Invest (ARKK) .
ARK Invest and its exchange traded funds operate in the arena and frontier of disruptive innovation.
The problem is the growing size (at its peak near $60 billion), the portfolios' growing illiquidity and the ("200 miles per hour) investment strategy practiced by ARK - may be a recipe for disaster should the pivot from growth to value continues. I have compared ARK to the Marsico Funds, Janus Funds, First Hand, the Manhattan Fund, Executive Life, Alger Funds, etc. - none of which ended well.
I remain short ARKK but do not recommend others to do so without doing there own homework!
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* ARK is this generation's template for growth investing (over value investing) and, like Robinhood, is the standard bearer for the democratization of our markets and market participation
IDK, my boomer brokerage offers free trades from my cell phone, and I don't need a fund with a 0.75% ER to day trade five or six headline-making tech names. A simpler explanation is that when a bubble is inflating, it makes sense to buy in and place a trailing stop-loss order. Heads I win big, tails I lose a little. It's the same gambling that people were doing on E-trade with Yahoo and Cisco stock 22 years ago.
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I remain short ARKK but do not recommend others to do so without doing there own homework!
Have you considered a bear put spread?
It's probably a bit late to switch, since ARKK lost -21% in the past 4 weeks (according to etfdb). That tends to make put options cost more.
For example, you buy $110 put on ARKK expiring Jan 2020, then sell a $100 put. Unfortunately it costs $7 to possibly make $10, but if you're confident of a -10% drop you can cash in whenever the stock is below $100 (below $100 the puts cancel each other, leaving a $10 gap).
When sentiment turns, it's cheaper to buy against the crowd. So if someone was optimistic on ARKK, they could buy a $115 call and sell a $130 call for an investment of $6.40/sh (giving it 2.3x potential for the full $15 spread). I think that investment has a better return because the market believes it's unlikely.
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Well, 1/3 of the recent losses to ARKK came back today.
That's gotta be some serious inflows. Would like to see that number. I wonder if it will hold?
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...it makes sense to buy in and place a trailing stop-loss order. Heads I win big, tails I lose a little.
Such EXCELLENT advice!
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Note that with very volatile stocks, a temporary drop can trigger your stop loss order.
ARKK's February peak was $159.70/sh, and it went from there gradually down to $106.25/sh on March 5. That 33% loss off the peak can trigger a lot of stop loss orders (It has recovered back to $121.75/sh before the open).
https://finance.yahoo.com/quote/ARKK/history?p=ARKK
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I really like these funds, but took the 100% profit and waiting for better entry. Kind of excited about commodities right now because of the 25%! currency debasement that happened and more to come. I mean, you have to be in companies that basically return 25% to break even and even more to make a profit!!! This could turn out really bad...
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Typically, after glowing headlines for the stellar performance in following the 2020 reflation and the huge inflows during the first 8 weeks of the year, the ARK funds are now slumping as investors are quietly deserting Cathie Wood (so much for long term investing) following a period of correction. the flagship ARKK fund is now down 35% from peak.
It's almost a textbook example of the dumb money jumping into the investment du jour and marking the peak.
https://etfdb.com/etf/ARKK/#fund-flows
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Sheer hubris. Wood expects 25% annualised return from here:
https://www.marketwatch.com/story/i-love-this-setup-star-stock-picker-cathie-wood-keeps-cool-over-ark-innovation-etfs-dismal-may-start-11620422368
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I mean, what do you think she is going to say? "Yeah, our funds suck now, these stocks have been so overvalued, don't buy them." She needs to keep pumping her product no matter how dismal things look.
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Closed my ARKK positions on the up day. Was able to take a small profit, but a sliver of what it was up back in Feb. I chalk this up to a great learning experience with the following learning points..
A. Don't be afraid to take profits. If something looks too good to be true, it probably is.
Related to this... I could really use a strategy to follow regarding profit taking. I'm tax averse and feel that holding for a year to reduce tax rates is a huge thing, but isn't everything. But honestly, taxes weren't even part of my thought process when it came to buying these shares. They were supposed to be part of my long term buy and hold portfolio. Obviously this thinking has changed which leads into the second learning point.
B. Don't stray too far from your investing thesis. I was influenced by a good friend at work who is a big Tesla bull. I admit to being lured by those obscene sp increases and wanted in on the action but didn't really want to buy TSLA itself because it's so woefully overvalued. ARKK was my opportunity.
I still believe TSLA is driven by near cult-like following of Lord Musk and once Cathie was attached to him by her bullish stance it spread to the rest of her holdings. I do still hold ARKF positions, so I'm not out of ARK entirely.
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Just started a new 401k at work. I’m putting in 1/2 ARKW and 1/2 FNGU on this pullback.
These are only something to hold in a bull market. A bear market like 1970s, 2000 or 2008 will wipe these out. Hoping I can time the top well. I think we have several more years.
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I finally bought into ARK but neither the ARKK or ARKW.. I went with a small position in ARKX as I think that should see some great growth over time.
I get Cathy was the darling for 2020 and now people are questioning that and these funds but honestly in you're in it for the long haul you should see some good returns in any of these funds. The return on the ARK funds for 2020 were an anomaly but so was 2020 in general. I bought my 1st position in an unknown ETF way back when called QQQ, look at that now.
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I finally bought into ARK but neither the ARKK or ARKW.. I went with a small position in ARKX as I think that should see some great growth over time.
I get Cathy was the darling for 2020 and now people are questioning that and these funds but honestly in you're in it for the long haul you should see some good returns in any of these funds. The return on the ARK funds for 2020 were an anomaly but so was 2020 in general. I bought my 1st position in an unknown ETF way back when called QQQ, look at that now.
ARKX held its ground from its IPO while the other ARKs fell sharply. I agree that ARKX "should" climb steadily over time, but the other ARKs "should" recover relatively quickly towards their ATH's. I think you just have to realize that these are all high risk & accept that they will move a lot more than safer investments.
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I finally bought into ARK but neither the ARKK or ARKW.. I went with a small position in ARKX as I think that should see some great growth over time.
I get Cathy was the darling for 2020 and now people are questioning that and these funds but honestly in you're in it for the long haul you should see some good returns in any of these funds. The return on the ARK funds for 2020 were an anomaly but so was 2020 in general. I bought my 1st position in an unknown ETF way back when called QQQ, look at that now.
ARKX held its ground from its IPO while the other ARKs fell sharply. I agree that ARKX "should" climb steadily over time, but the other ARKs "should" recover relatively quickly towards their ATH's. I think you just have to realize that these are all high risk & accept that they will move a lot more than safer investments.
Totally agree. If in it for the long haul it will all be fine, if you want to watch it daily and day trade it you will have extreme highs and lows like the fund :)
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I finally bought into ARK but neither the ARKK or ARKW.. I went with a small position in ARKX as I think that should see some great growth over time.
I get Cathy was the darling for 2020 and now people are questioning that and these funds but honestly in you're in it for the long haul you should see some good returns in any of these funds. The return on the ARK funds for 2020 were an anomaly but so was 2020 in general. I bought my 1st position in an unknown ETF way back when called QQQ, look at that now.
ARKX held its ground from its IPO while the other ARKs fell sharply. I agree that ARKX "should" climb steadily over time, but the other ARKs "should" recover relatively quickly towards their ATH's. I think you just have to realize that these are all high risk & accept that they will move a lot more than safer investments.
You really think companies operating in the "Space Travel & Innovation" sector are going to be low risk, cash generative, reliable steady earners that will consistently grow earnings year on year?
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I finally bought into ARK but neither the ARKK or ARKW.. I went with a small position in ARKX as I think that should see some great growth over time.
I get Cathy was the darling for 2020 and now people are questioning that and these funds but honestly in you're in it for the long haul you should see some good returns in any of these funds. The return on the ARK funds for 2020 were an anomaly but so was 2020 in general. I bought my 1st position in an unknown ETF way back when called QQQ, look at that now.
ARKX held its ground from its IPO while the other ARKs fell sharply. I agree that ARKX "should" climb steadily over time, but the other ARKs "should" recover relatively quickly towards their ATH's. I think you just have to realize that these are all high risk & accept that they will move a lot more than safer investments.
You really think companies operating in the "Space Travel & Innovation" sector are going to be low risk, cash generative, reliable steady earners that will consistently grow earnings year on year?
Yes because if you look at the holdings they really are more about innovation that can be applied to space then space travel. If you take a look there are companies like Boeing, Deere, Airbus, Netflix, chip makers etc. I saw an interview with Woods and they asked why Netflix in there. Her answer was related to how with more satellites being launched eventually a billion people without Netflix will be able to get it where there is no cable or options. My point is if you just think about it as companies like Virgin Galactic then I would think it's probably not a good investment currently but if you check out the holding I think it is. Of course I could be totally wrong but that's the gamble of the stock market right :)
** Just went to find Top 10 holdings (attached)
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Closed my ARKK positions on the up day. Was able to take a small profit, but a sliver of what it was up back in Feb. I chalk this up to a great learning experience with the following learning points..
A. Don't be afraid to take profits. If something looks too good to be true, it probably is.
Related to this... I could really use a strategy to follow regarding profit taking. I'm tax averse and feel that holding for a year to reduce tax rates is a huge thing, but isn't everything. But honestly, taxes weren't even part of my thought process when it came to buying these shares. They were supposed to be part of my long term buy and hold portfolio. Obviously this thinking has changed which leads into the second learning point.
B. Don't stray too far from your investing thesis. I was influenced by a good friend at work who is a big Tesla bull. I admit to being lured by those obscene sp increases and wanted in on the action but didn't really want to buy TSLA itself because it's so woefully overvalued. ARKK was my opportunity.
I still believe TSLA is driven by near cult-like following of Lord Musk and once Cathie was attached to him by her bullish stance it spread to the rest of her holdings. I do still hold ARKF positions, so I'm not out of ARK entirely.
was part of your learning experience knowingly selling near a YTD low in the midst of a tech pullback prior to recovery?
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I recently bought in around $104-105, i just opened my brokerage account back in March and fully admit i dont really know what i am doing. i am all sp500 and the like in my 401k, my brokerage account is ~1-2% of my 401k. i am using it to buy a random assortment of things like ARKK, Gold miners, AVUV, and VTI, just to get my feet wet and learn till it grows to where i need to be more serious with it.
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Closed my ARKK positions on the up day. Was able to take a small profit, but a sliver of what it was up back in Feb. I chalk this up to a great learning experience with the following learning points..
A. Don't be afraid to take profits. If something looks too good to be true, it probably is.
Related to this... I could really use a strategy to follow regarding profit taking. I'm tax averse and feel that holding for a year to reduce tax rates is a huge thing, but isn't everything. But honestly, taxes weren't even part of my thought process when it came to buying these shares. They were supposed to be part of my long term buy and hold portfolio. Obviously this thinking has changed which leads into the second learning point.
B. Don't stray too far from your investing thesis. I was influenced by a good friend at work who is a big Tesla bull. I admit to being lured by those obscene sp increases and wanted in on the action but didn't really want to buy TSLA itself because it's so woefully overvalued. ARKK was my opportunity.
I still believe TSLA is driven by near cult-like following of Lord Musk and once Cathie was attached to him by her bullish stance it spread to the rest of her holdings. I do still hold ARKF positions, so I'm not out of ARK entirely.
was part of your learning experience knowingly selling near a YTD low in the midst of a tech pullback prior to recovery?
Tell us more about how you got the timing right.
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The johnny come lately hot money chasers are now well and truly losing their shirts as last year's star performer becomes this year's turkey.
ARKK fund now down -31% YTD.
Normally I wouldn't say that was terrible in a high risk fund, bit it takes some doing in a year when the QQQ is up 20+%.
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I don't know that ARKK is as bad as everyone says in the past few posts.
ARKK is more concentrated and meant to be a very long term hold anyway. It's down -31% from peak but it's basically impossible to time the market (https://goodmoneygoodlife.com/safest-investment-with-the-highest-return/#Why_The_SP500_Is_The_Safest_Investment_With_The_Highest_Return), as you know.
The reason for ARKK's volatility is their heavy concentration on one sector which is technology, which has been a sector that's been volatile since the great depression, but also responsible for the most long-term gains.
But it's like just watch, if PLTR or some other tech company skyrockets and ARKK goes up by 80%, everyone'll be like "Cathy Wood's A Genius!"
Easy to call the game with today's results. Hard to call any firm's performance over the long term. Though, if you were to pick a random sample size of funds, you'll probably find that most funds will simply underperform the S&P over the long term.
At the end of the day, buying ARKK is just like buying any super tech-heavy funds. It'll be volatile, but if it moons, you get a lambo.
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ARK funds invest in companies based on 5-year time horizons, so kinda silly to critique fund performance based on the past 6 months. Only lesson here is don’t invest in ARK funds if you’re gonna need the funds near term. They have subject matter experts in house and don’t care about quarterly results, a rarity these days.
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I don't know that ARKK is as bad as everyone says in the past few posts.
ARKK is more concentrated and meant to be a very long term hold anyway. It's down -31% from peak but it's basically impossible to time the market (https://goodmoneygoodlife.com/safest-investment-with-the-highest-return/#Why_The_SP500_Is_The_Safest_Investment_With_The_Highest_Return), as you know.
The reason for ARKK's volatility is their heavy concentration on one sector which is technology, which has been a sector that's been volatile since the great depression, but also responsible for the most long-term gains.
But it's like just watch, if PLTR or some other tech company skyrockets and ARKK goes up by 80%, everyone'll be like "Cathy Wood's A Genius!"
Easy to call the game with today's results. Hard to call any firm's performance over the long term. Though, if you were to pick a random sample size of funds, you'll probably find that most funds will simply underperform the S&P over the long term.
At the end of the day, buying ARKK is just like buying any super tech-heavy funds. It'll be volatile, but if it moons, you get a lambo.
Most of my criticism is not really of ARKK or Cathie Wood, it's her so-called investors. It could just as easily be any fund and we'd have seen the same behaviour.
Look at the money flows into the fund early this year AFTER it had run up. All those people are now sitting on losses. Most of her investors are currently sitting on losses.
https://etfdb.com/etf/ARKK/#fund-flows
As I have said numerous times, its an open secret that most people who invest in stocks don't capture anything near the internal rate of return of the instrument they're investing in, because of sub optimal behaviour, buying high on FOMO and selling low on Panic. This is a classic real time example of that behaviour in action - your average ARK investor is just as stupid, emotional and driven by newsflow and as they have ever been.
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I don't know that ARKK is as bad as everyone says in the past few posts.
ARKK is more concentrated and meant to be a very long term hold anyway. It's down -31% from peak but it's basically impossible to time the market (https://goodmoneygoodlife.com/safest-investment-with-the-highest-return/#Why_The_SP500_Is_The_Safest_Investment_With_The_Highest_Return), as you know.
The reason for ARKK's volatility is their heavy concentration on one sector which is technology, which has been a sector that's been volatile since the great depression, but also responsible for the most long-term gains.
But it's like just watch, if PLTR or some other tech company skyrockets and ARKK goes up by 80%, everyone'll be like "Cathy Wood's A Genius!"
Easy to call the game with today's results. Hard to call any firm's performance over the long term. Though, if you were to pick a random sample size of funds, you'll probably find that most funds will simply underperform the S&P over the long term.
At the end of the day, buying ARKK is just like buying any super tech-heavy funds. It'll be volatile, but if it moons, you get a lambo.
Most of my criticism is not really of ARKK or Cathie Wood, it's her so-called investors. It could just as easily be any fund and we'd have seen the same behaviour.
Look at the money flows into the fund early this year AFTER it had run up. All those people are now sitting on losses. Most of her investors are currently sitting on losses.
https://etfdb.com/etf/ARKK/#fund-flows
As I have said numerous times, its an open secret that most people who invest in stocks don't capture anything near the internal rate of return of the instrument they're investing in, because of sub optimal behaviour, buying high on FOMO and selling low on Panic. This is a classic real time example of that behaviour in action - your average ARK investor is just as stupid, emotional and driven by newsflow and as they have ever been.
Odd statement, you start by saying your issue is with ARK investors not ARK or Cathie, but then go on to admit that most investors in general are guilty of poor, emotional decision making, which begs the question, why single out ARK investors? Didn’t buy at the peak, but I’ll admit to being underwater on two ARK funds that I purchased this year. I’m not worried in the slightest. I knew these are growth tech funds subject to high volatility. Kathy and crew invest based on a 5-year time horizon. I will hold these funds for that long or longer. I’ve held Tesla since 2013, so no stranger to volatility. I see the same type of special disdain that gets thrown at Tesla thrown at Cathie, which is ironic, since it seems its own form of emotional or illogical bias.
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I bought 200 shares of ARKK earlier this year at about the price it is now, 96 or 97 dollars. I just put an order in for another 100 shares if it dios to 88 dollars.
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As we all know, the deeper it falls, the harder it is just to get back.
Those investors who owned the peak and have ridden the -45% fall since then only need an 82% rally to get back. Let's call it 90% in real terms when you factor in all the inflation since then.
Yeah Cathie, you better be hitting those 30-40% returns you're forecasting...
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
People mocked her for her early on-board Tesla investment too. Sure, no guarantee of success going forward, but also way too early to say she’s selling snake oil. Her funds are down over the last six months, who cares, she’s very clear that ARK invests on a 5 year horizon. Tesla went mostly sideways for years....until it didn’t. Those in then know that ignored the SP movement and focused on the company’s performance were rewarded. That’s the nature of investing in disruptive technology. No need to argue it though, let’s check back in a few years.
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
People mocked her for her early on-board Tesla investment too. Sure, no guarantee of success going forward, but also way too early to say she’s selling snake oil. Her funds are down over the last six months, who cares, she’s very clear that ARK invests on a 5 year horizon. Tesla went mostly sideways for years....until it didn’t. Those in then know that ignored the SP movement and focused on the company’s performance were rewarded. That’s the nature of investing in disruptive technology. No need to argue it though, let’s check back in a few years.
And that 5yr horizon is now a 4yr horizon since people piled in a year ago. 5 years is a very short period of time to setting expectations for your investors when most of your companies have never turned so much a a penny of profit.
On one hand you have Vanguard saying "do what we recommend and you should earn 3-4% for the next 10 years."
"On the other hand you have Cathie saying do what I recommend and you should earn 30-40% for the next 5 years."
Its possible both these could be accurate, but much more likely that one of them will be spectacularly wrong.
For all of Buffett and Munger's warts, they have never been stupid enough to start predicting their future performance, they always simply promise to do what best do is in their own power, which is to research and buy good companies at prices which provide a reasonable margin of safety based on the best estimate of the future cashflows of the business. They know how difficult it is to sustain even any positive excess return over time.
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
People mocked her for her early on-board Tesla investment too. Sure, no guarantee of success going forward, but also way too early to say she’s selling snake oil. Her funds are down over the last six months, who cares, she’s very clear that ARK invests on a 5 year horizon. Tesla went mostly sideways for years....until it didn’t. Those in then know that ignored the SP movement and focused on the company’s performance were rewarded. That’s the nature of investing in disruptive technology. No need to argue it though, let’s check back in a few years.
And that 5yr horizon is now a 4yr horizon since people piled in a year ago. 5 years is a very short period of time to setting expectations for your investors when most of your companies have never turned so much a a penny of profit.
On one hand you have Vanguard saying "do what we recommend and you should earn 3-4% for the next 10 years."
"On the other hand you have Cathie saying do what I recommend and you should earn 30-40% for the next 5 years."
Its possible both these could be accurate, but much more likely that one of them will be spectacularly wrong.
For all of Buffett and Munger's warts, they have never been stupid enough to start predicting their future performance, they always simply promise to do what best do is in their own power, which is to research and buy good companies at prices which provide a reasonable margin of safety based on the best estimate of the future cashflows of the business. They know how difficult it is to sustain even any positive excess return over time.
Someone who bought ARK-K Innovation Fund five years ago is up 390% on their investment. That’s a 78% annual return even after the recent drop! Same for ARK-G, if you bought five years ago, you’re up 309% or 61% annual return. Remind me again of the problem here? Let’s check in again in a few years because it's easy to kick ARK and Cathie when tech is dipping and ARK funds got overheated with new investors piling on. They were due for a retraction. Doesn’t mean Cathie is a fraud. Past performance suggests Cathie and crew know what they're doing. Wall Street analysts set price targets all the time, usually one-year targets. Not sure why Cathie is getting singled out for offering guidance for a five-year horizon. Much like with Elon/Tesla, it comes off as personal somehow.
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One can pick and choose start dates. Nasdaq is benchmark and roughly flat given the additional risk over the life of the fund relative to this free index fund. Her average dollar managed is down HUGE as she rode the Fed induced rip. Now that this is ending, the tide is receding and showing her true investing skill. Nobody can argue that she is enriching herself, but the majority of her investors are getting fleeced and drunk on her Kool-Aid.
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I have them all in my M1 taxable account. So far they are the 2nd best performers behind MSTR. I am for the most part a terrible stock picker and get nervous and sell at the wrong times and cannot stop tinkering. Realized some time ago that Cathy and crew do it much better then I and I will gladly pay them for the service. I tried being a value investor for over 10 years and got crushed over and over and over again. I have given up and joined the heard and sticking with innovation in my taxable account as I am tired of seeing everyone around me get rich while my portfolio stayed stagnant. I'm sure it will crash now that I have capitulated.
Without wishing to be unkind to @effigy98 , I think this post will mark the high watermark of the "Tech is the future, value is dead" trade, and the next few years will see a lot of mean reversion.
Agreed. The reversion has already started.
Couldn't really have called this one any better.
Since effergy98's post on 9th Feb 2021:
$10,000 invested in ARKK is worth about $6,500 today.
$10,000 invested in BRK.A is worth about $13,000 today.
So your investment would be worth twice as much today had you stuck with boring old Warren as it would have been with exciting Aunt Cathie - in under a year!
Yes, this is a cherry picked timeframe, but it's also an appropriate one, as it is from the peak frenzy when the inflows to the funds were going bananas, and everyone was proclaiming that "value is dead, innovation is the future!"
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
People mocked her for her early on-board Tesla investment too. Sure, no guarantee of success going forward, but also way too early to say she’s selling snake oil. Her funds are down over the last six months, who cares, she’s very clear that ARK invests on a 5 year horizon. Tesla went mostly sideways for years....until it didn’t. Those in then know that ignored the SP movement and focused on the company’s performance were rewarded. That’s the nature of investing in disruptive technology. No need to argue it though, let’s check back in a few years.
And that 5yr horizon is now a 4yr horizon since people piled in a year ago. 5 years is a very short period of time to setting expectations for your investors when most of your companies have never turned so much a a penny of profit.
On one hand you have Vanguard saying "do what we recommend and you should earn 3-4% for the next 10 years."
"On the other hand you have Cathie saying do what I recommend and you should earn 30-40% for the next 5 years."
Its possible both these could be accurate, but much more likely that one of them will be spectacularly wrong.
For all of Buffett and Munger's warts, they have never been stupid enough to start predicting their future performance, they always simply promise to do what best do is in their own power, which is to research and buy good companies at prices which provide a reasonable margin of safety based on the best estimate of the future cashflows of the business. They know how difficult it is to sustain even any positive excess return over time.
Someone who bought ARK-K Innovation Fund five years ago is up 390% on their investment. That’s a 78% annual return even after the recent drop! Same for ARK-G, if you bought five years ago, you’re up 309% or 61% annual return. Remind me again of the problem here? Let’s check in again in a few years because it's easy to kick ARK and Cathie when tech is dipping and ARK funds got overheated with new investors piling on. They were due for a retraction. Doesn’t mean Cathie is a fraud. Past performance suggests Cathie and crew know what they're doing. Wall Street analysts set price targets all the time, usually one-year targets. Not sure why Cathie is getting singled out for offering guidance for a five-year horizon. Much like with Elon/Tesla, it comes off as personal somehow.
According to MorningStar, ARKK's 5yr annualised return is 34.38%
Of course that's a fantastic return. Except that hands up anyone in the room who was invested with them back in Jan 2017? No? Didn't think so. It's easy to pick out fund AFTER they have grown and say "look how well the holders have done" but the reality is that nobody puts any sort of meaningful amount of money into a fund before it has had its stellar performance period. People pile into funds after they have had a massive run up.
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
People mocked her for her early on-board Tesla investment too. Sure, no guarantee of success going forward, but also way too early to say she’s selling snake oil. Her funds are down over the last six months, who cares, she’s very clear that ARK invests on a 5 year horizon. Tesla went mostly sideways for years....until it didn’t. Those in then know that ignored the SP movement and focused on the company’s performance were rewarded. That’s the nature of investing in disruptive technology. No need to argue it though, let’s check back in a few years.
And that 5yr horizon is now a 4yr horizon since people piled in a year ago. 5 years is a very short period of time to setting expectations for your investors when most of your companies have never turned so much a a penny of profit.
On one hand you have Vanguard saying "do what we recommend and you should earn 3-4% for the next 10 years."
"On the other hand you have Cathie saying do what I recommend and you should earn 30-40% for the next 5 years."
Its possible both these could be accurate, but much more likely that one of them will be spectacularly wrong.
For all of Buffett and Munger's warts, they have never been stupid enough to start predicting their future performance, they always simply promise to do what best do is in their own power, which is to research and buy good companies at prices which provide a reasonable margin of safety based on the best estimate of the future cashflows of the business. They know how difficult it is to sustain even any positive excess return over time.
Someone who bought ARK-K Innovation Fund five years ago is up 390% on their investment. That’s a 78% annual return even after the recent drop! Same for ARK-G, if you bought five years ago, you’re up 309% or 61% annual return. Remind me again of the problem here? Let’s check in again in a few years because it's easy to kick ARK and Cathie when tech is dipping and ARK funds got overheated with new investors piling on. They were due for a retraction. Doesn’t mean Cathie is a fraud. Past performance suggests Cathie and crew know what they're doing. Wall Street analysts set price targets all the time, usually one-year targets. Not sure why Cathie is getting singled out for offering guidance for a five-year horizon. Much like with Elon/Tesla, it comes off as personal somehow.
According to MorningStar, ARKK's 5yr annualised return is 34.38%
Of course that's a fantastic return. Except that hands up anyone in the room who was invested with them back in Jan 2017? No? Didn't think so. It's easy to pick out fund AFTER they have grown and say "look how well the holders have done" but the reality is that nobody puts any sort of meaningful amount of money into a fund before it has had its stellar performance period. People pile into funds after they have had a massive run up.
ARK invests on a 5-year horizon. Folks who did invest 5 years ago have been richly rewarded. Let’s check back in four years to see if folks who invested last year fare as well or not. The numbers are the numbers. Just think it odd everyone, including FIRE folks who are supposed to take the long view, are writing off a volatile technology/innovation fund after a six month pull back that has hammered a lot of technology stocks. Folks love to denigrate a stock/fund that they didn’t catch the minute it pulls back.
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ARK invests on a 5-year horizon. Folks who did invest 5 years ago have been richly rewarded. Let’s check back in four years to see if folks who invested last year fare as well or not. The numbers are the numbers. Just think it odd everyone, including FIRE folks who are supposed to take the long view, are writing off a volatile technology/innovation fund after a six month pull back that has hammered a lot of technology stocks. Folks love to denigrate a stock/fund that they didn’t catch the minute it pulls back.
[/quote]
Bernie Madoff also stressed his long-term horizon. This is what all failing money managers stress "Look in the rearview mirror, DAMMIT". ARKK has lost more money for investors and the market is at an all-time high, if/when the market tanks, how do you think ARKK will perform? There are always dead cat bounces as market turns, but ARKK investors getting crushed, ARKK managers are getting rich and the market is still peaking. It's pretty obvious why the media still champions Wood as a stock picking "genius" despite utter failure for most investors.
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ARK invests on a 5-year horizon. Folks who did invest 5 years ago have been richly rewarded. Let’s check back in four years to see if folks who invested last year fare as well or not. The numbers are the numbers. Just think it odd everyone, including FIRE folks who are supposed to take the long view, are writing off a volatile technology/innovation fund after a six month pull back that has hammered a lot of technology stocks. Folks love to denigrate a stock/fund that they didn’t catch the minute it pulls back.
Bernie Madoff also stressed his long-term horizon. This is what all failing money managers stress "Look in the rearview mirror, DAMMIT". ARKK has lost more money for investors and the market is at an all-time high, if/when the market tanks, how do you think ARKK will perform? There are always dead cat bounces as market turns, but ARKK investors getting crushed, ARKK managers are getting rich and the market is still peaking. It's pretty obvious why the media still champions Wood as a stock picking "genius" despite utter failure for most investors.
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You lost me at Bernie Madoff.
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To my point about ARKK being one of those notorious hype funds where everyone jumps in at the top and a major reason why it's not a good idea to invest in higher risk funds - because although sometimes they do sometimes manage to generate higher returns, for the average investor this is nearly always negated by their volatility which engenders massively suboptimal investor behaviour.
https://www.morningstar.com/articles/1071658/arkk-an-object-lesson-in-how-not-to-invest
Over the past five years, for example, the fund’s 41.3% annualized return places it among the top five best-performing U.S. equity funds and ETFs, and it trounced the S&P 500 (the benchmark listed in its prospectus) by more than 15 percentage points per year. After the adjusting for the timing of cash inflows and outflows, though, we estimate that investors earned less than a fourth of that return. ARKK’s estimated 9.9% investor return over the past five years lagged its benchmark by about 8 percentage points per year.
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Well, I am an individual of a low faith. I don't have faith in churches, bitcoins, any Woods, or any religions like that. I trust science.
I don't believe in some "Easy Buttons". Buying crypto, ARK to get rich seems to me too easy to be true. Meaning my brain says "false prophets", turn away.
Thus I only stick to passive major indexes.
But in general i think that in the longer term US market, technology (as a major component) is the place to be.
I wish i could be more a person of faith, but i'm too inferior somehow.
Maybe if i could join some "religion", it would make me very rich and very happy?
Any pointers how to become a persons of faith would be welcomed; maybe i'm losing something (that i'm not aware of)?
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And the air continues to escape from these money burning turkey funds.
At today’s closing price the ARKK fund needs to more than double to get back to the peak price it was at only 11 months ago. Some of the other ETFs bandied about in this thread like the next rocket ship have fared even worse.
This was a “disruptive tech” bubble propelled by hype and hope that is now popping. Just as with dotcom stocks, a few of the companies in these funds may one day become viable long term businesses, but all of them already trade at eyewatering valuations, and the vast majority of them will never turn a profit and go bust.
It doesn’t matter how clever or disruptive a company is, or even how fast it is growing. If you overpay for it then your results will be mediocre.
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The situation at ARK is quite complex as they received a ton of new money last year, ran up low float securities and are now stuck. Every redemption causes more sales, which causes more redemptions. The exact opposite of what happened last year when more new money resulted in buying more, higher prices, more money, buying more. Their only hope is some kind of merger where ARK redemptions could be offset in house.
ARK managers are CRUSHING it, but investors are getting fleeced, with no end in sight.
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The situation at ARK is quite complex as they received a ton of new money last year, ran up low float securities and are now stuck. Every redemption causes more sales, which causes more redemptions. The exact opposite of what happened last year when more new money resulted in buying more, higher prices, more money, buying more. Their only hope is some kind of merger where ARK redemptions could be offset in house.
ARK managers are CRUSHING it, but investors are getting fleeced, with no end in sight.
It was also a marketing gimmick to set up the funds under ETF structure. These are high fee actively managed funds.
One of the reasons Buffett set up Berkshire as a close ended company was so that he would never come under pressure to sell to meet redemptions when stocks were falling.
Ben Carlson & Michael Batnick discuss ARKK and a lot of the points that I've highlighted in my last few posts, mainly about cashflows and how the money always pours in after the big move. https://awealthofcommonsense.com/2022/01/animal-spirits-25-million-new-brokerage-accounts/
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The situation at ARK is quite complex as they received a ton of new money last year, ran up low float securities and are now stuck. Every redemption causes more sales, which causes more redemptions. The exact opposite of what happened last year when more new money resulted in buying more, higher prices, more money, buying more. Their only hope is some kind of merger where ARK redemptions could be offset in house.
ARK managers are CRUSHING it, but investors are getting fleeced, with no end in sight.
It was also a marketing gimmick to set up the funds under ETF structure. These are high fee actively managed funds.
One of the reasons Buffett set up Berkshire as a close ended company was so that he would never come under pressure to sell to meet redemptions when stocks were falling.
Ben Carlson & Michael Batnick discuss ARKK and a lot of the points that I've highlighted in my last few posts, mainly about cashflows and how the money always pours in after the big move. https://awealthofcommonsense.com/2022/01/animal-spirits-25-million-new-brokerage-accounts/
Yep. One has to assume ARK was either devious in purposedly setting up the fund to gain from running up illiquid securities, showing performance and gaining AUM, without care if the investor makes money or they are total idiots chasing performance and will end much like when a dog finally catches up to the car. You can't have it both ways.
I'm sure there is a more eloquent name, but these could be called "one-way strategies" where nobody can get out. This is similar to the perma-buy analyst, it looks good while the company is doing well, but only works one way. ARK will come out with more "We will make 40% for the next five years" delusions when they are crushing the average ARK investor (down 27% as of below calculation).
Weighted by when inflows occurred, the average investor in five ARK ETFs is sitting on a 27% loss, Bespoke Investment Group wrote in a Tuesday note. The firm monitors a slew of the firm’s funds as a proxy for market risk appetite.
Read more at: https://www.bloombergquint.com/markets/cathie-wood-s-famous-outperformance-versus-the-s-p-500-is-fading
Copyright © BloombergQuint
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Prior to Ark, didn't Cathie's other funds also have a bottle-rocket type trajectory?
Also, if she was telling everyone she invests on a 5 year time frame, and ARKK is 5 years old last year... wasn't she basically telling you to get out?
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So was ark basically a ponzi scheme? Or just the standard active investment fad nonsense?
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So was ark basically a ponzi scheme? Or just the standard active investment fad nonsense?
Back in the day the were called pump and dump schemes.
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So was ark basically a ponzi scheme? Or just the standard active investment fad nonsense?
Back in the day the were called pump and dump schemes.
Ah yeah, that’s the term I was thinking! Thanks!
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The situation at ARK is quite complex as they received a ton of new money last year, ran up low float securities and are now stuck. Every redemption causes more sales, which causes more redemptions. The exact opposite of what happened last year when more new money resulted in buying more, higher prices, more money, buying more. Their only hope is some kind of merger where ARK redemptions could be offset in house.
ARK managers are CRUSHING it, but investors are getting fleeced, with no end in sight.
It was also a marketing gimmick to set up the funds under ETF structure. These are high fee actively managed funds.
One of the reasons Buffett set up Berkshire as a close ended company was so that he would never come under pressure to sell to meet redemptions when stocks were falling.
Ben Carlson & Michael Batnick discuss ARKK and a lot of the points that I've highlighted in my last few posts, mainly about cashflows and how the money always pours in after the big move. https://awealthofcommonsense.com/2022/01/animal-spirits-25-million-new-brokerage-accounts/
Yep. One has to assume ARK was either devious in purposedly setting up the fund to gain from running up illiquid securities, showing performance and gaining AUM, without care if the investor makes money or they are total idiots chasing performance and will end much like when a dog finally catches up to the car. You can't have it both ways.
I'm sure there is a more eloquent name, but these could be called "one-way strategies" where nobody can get out. This is similar to the perma-buy analyst, it looks good while the company is doing well, but only works one way. ARK will come out with more "We will make 40% for the next five years" delusions when they are crushing the average ARK investor (down 27% as of below calculation).
Weighted by when inflows occurred, the average investor in five ARK ETFs is sitting on a 27% loss, Bespoke Investment Group wrote in a Tuesday note. The firm monitors a slew of the firm’s funds as a proxy for market risk appetite.
Read more at: https://www.bloombergquint.com/markets/cathie-wood-s-famous-outperformance-versus-the-s-p-500-is-fading
Copyright © BloombergQuint
We haven't even come close to a panic selling bottom yet, as most investors are grimly hanging on and trying to convince themselves that the story is much better than the reality. If you think the current falls are savage, just wait until investors have head to the fire exit and these funds become forced sellers to meet redemptions.
Still, ARK and Wood manage to command remarkable investor loyalty. The latest data showed an inflow of about $193 million into ARKK. And almost all of the more than $15 billion drop in assets managed by the fund has come from underperformance rather than outflows.
We're somewhere around the "denial" stage
(https://www.newsbtc.com/wp-content/uploads/2020/03/Bitcoin-crypto-market-cycle-psycology-wall-street-cheat-sheet-860x418.jpg)
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ARKK is destined to be a survivorship bias example.
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Could get ugly for ARK and other investors who are looking 5 years forward. No new buyers, bottom is a long way down.
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So was ark basically a ponzi scheme? Or just the standard active investment fad nonsense?
This appears to be more of a market manipulation as ARK appeared to target illiquid stocks, run them up to report performance, increase AUM and let the fees enrich the managers. There is no plan for any redemptions and why even small redemptions cause major losses for shareholders. It's similar to AMC/GME where nobody thinks the companies are worth anything but ran them up to squeeze shorts.
Another more scathing article.
https://www.ft.com/content/07d9b3c3-9c8a-4d0f-bf25-a9e419d5b949?shareType=nongift
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Margin calls involving ARK holdings will start today or Monday and just crush the strategy. As bad as it looks now, the margin calls will make this look like a pleasant market dip. Every firm is different, but most give a few days to meet calls, and then start selling everything.
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I don't understand why there'd be margin calls in particular on ark funds.
Is ark a leveraged ETF? Even so, if you buy a leveraged fund, doesn't that mean you just magnify your gains/loses, not that you yourself are actually on margin?
If not, it's just a managed fund that has lost a lot of money recently. Are there figures on how many holders are on margin? I do see there is a bit of short interest in ARKK.
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I don't understand why there'd be margin calls in particular on ark funds.
Is ark a leveraged ETF? Even so, if you buy a leveraged fund, doesn't that mean you just magnify your gains/loses, not that you yourself are actually on margin?
If not, it's just a managed fund that has lost a lot of money recently. Are there figures on how many holders are on margin? I do see there is a bit of short interest in ARKK.
It's the underlying securities owned by ARK have been crushed and will trigger margin calls. Anyone holding these (PTON, ROKU, ZM, PLTR, other junk tech) in a margin account will most likely have margin calls, ARK will go down when investors holding these individual securities have to sell, ARK lower, cascade lower, only significant new money can stop the cascade lower. There is nothing wrong with ARK and Archegos, LTCM or other one way strategy as long as investors understand this is a lottery ticket and eventually it will be worthless and trade appropriately.
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sorry, I can't resist..
(https://memegenerator.net/img/instances/54748654.jpg)
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I don't understand why there'd be margin calls in particular on ark funds.
Is ark a leveraged ETF? Even so, if you buy a leveraged fund, doesn't that mean you just magnify your gains/loses, not that you yourself are actually on margin?
If not, it's just a managed fund that has lost a lot of money recently. Are there figures on how many holders are on margin? I do see there is a bit of short interest in ARKK.
It's the underlying securities owned by ARK have been crushed and will trigger margin calls. Anyone holding these (PTON, ROKU, ZM, PLTR, other junk tech) in a margin account will most likely have margin calls, ARK will go down when investors holding these individual securities have to sell, ARK lower, cascade lower, only significant new money can stop the cascade lower. There is nothing wrong with ARK and Archegos, LTCM or other one way strategy as long as investors understand this is a lottery ticket and eventually it will be worthless and trade appropriately.
Thanks, this logic makes more sense to me on how that margin might effect it, but that is really true of any mutual or ETF then, and everyone is down today....so seems we are all hitting the domino effect.
In terms of ARK stocks being junk, I'm wondering why and how that is being determined? roku and zm seem like solid companies to me, I know pton is suddenly facing hurdles - but I don't see it listed for arkk
I just started looking into this with this thread and wondering if this is a good buying opportunity.
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Thanks, this logic makes more sense to me on how that margin might effect it, but that is really true of any mutual or ETF then, and everyone is down today....so seems we are all hitting the domino effect.
ARK also has big positions in fairly small companies. So what works on the way up repeats on the way down, new inflow due to FOMO, more money to invest, bids up prices of these shares in the process, returns get even better which attracts more fresh money and so on. When it tanks, the same process works in reverse.
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I don't understand why there'd be margin calls in particular on ark funds.
Is ark a leveraged ETF? Even so, if you buy a leveraged fund, doesn't that mean you just magnify your gains/loses, not that you yourself are actually on margin?
If not, it's just a managed fund that has lost a lot of money recently. Are there figures on how many holders are on margin? I do see there is a bit of short interest in ARKK.
It's the underlying securities owned by ARK have been crushed and will trigger margin calls. Anyone holding these (PTON, ROKU, ZM, PLTR, other junk tech) in a margin account will most likely have margin calls, ARK will go down when investors holding these individual securities have to sell, ARK lower, cascade lower, only significant new money can stop the cascade lower. There is nothing wrong with ARK and Archegos, LTCM or other one way strategy as long as investors understand this is a lottery ticket and eventually it will be worthless and trade appropriately.
Thanks, this logic makes more sense to me on how that margin might effect it, but that is really true of any mutual or ETF then, and everyone is down today....so seems we are all hitting the domino effect.
In terms of ARK stocks being junk, I'm wondering why and how that is being determined? roku and zm seem like solid companies to me, I know pton is suddenly facing hurdles - but I don't see it listed for arkk
I just started looking into this with this thread and wondering if this is a good buying opportunity.
Investors are not using WMT, PG, BAC, JPM, PFE, HD in margin accounts. ARK purposedly bought companies with low liquidity to drive up the price. Buying $1,000,000 of PLTR vs buying the same amount in MSFT is completely different. ARK is a one-way trade, which will cut both ways.
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The slope of hope is eternal, and we are nowhere near capitulation yet.
People are not yet heading for the exits...Rather, the opposite is happening. People are piling INTO the fund even as it tanks - half a billion of net inflows in the last fortnight.
https://etfdb.com/etf/ARKK/#fund-flows
Perhaps this is the first time in history that the lemmings actually wisen up and buy at the bottom... or maybe its just a fresh injection of positive sentiment that will need to be crushed before the bottom is in.
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The slope of hope is eternal, and we are nowhere near capitulation yet.
People are not yet heading for the exits...Rather, the opposite is happening. People are piling INTO the fund even as it tanks - half a billion of net inflows in the last fortnight.
https://etfdb.com/etf/ARKK/#fund-flows
Perhaps this is the first time in history that the lemmings actually wisen up and buy at the bottom... or maybe its just a fresh injection of positive sentiment that will need to be crushed before the bottom is in.
This is one of the more insidious legal investment schemes I've seen, as financial news is still pumping her as some kind of stock picking guru. ARK is one of the worst performing public investment when evaluated on dollar return to investors and getting worse. A few weeks ago the average dollar invested was down nearly 30% before the last two weeks of January. There is no way to exit most trades as the stock ARK owns have low liquidity. The sooner investors get out the better.
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ARKK is -23% YTD as of market close on Feb 4.
https://www.morningstar.com/etfs/arcx/arkk/performance
Since DaTrill broke the ice on the contrarian view... when asking for "ARKK" holders - do negative shares count? There's a new ETF called "SARK" which holds short exposure to everything in ARKK.
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The more important measure is the dollar investor return, which estimates how much the average investors has gained/lost in the investment. This is a more valid measure of how much value ARK has increased or destroyed for investors and it's a historic loss for ARK investors. All ARK funds did is run up illiquid stocks, this is not stock picking and there is no way to unwind this trade without more losses.
SARK and any short ETF needs to be investigated with great care as what the investment proclaims and what the investment delivers can be starkly different and only be determined by reading the prospectus.
IMHO, investments that enrich the managers and impoverished investors should not be allowed in regulated markets. Other insidious investments are any leveraged 2x, 3x ETFs also don't deliver on what most investors assume and IMHO, should be banned along with strategies that have no exit plan for investors. Owners/managers of companies bought by ARK were provided great exit points, but investors will be left holding the bag.
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Do you really want this idiot managing your money?
(https://i.postimg.cc/Nj8cD857/Capture.png)
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Other insidious investments are any leveraged 2x, 3x ETFs also don't deliver on what most investors assume and IMHO, should be banned along with strategies that have no exit plan for investors.
I made a shit ton of money off DPST, which is 3x regional banks, after the market left it in the toilet in 2020. So my vote is naturally for keeping it. For anyone who hates 2x/3x ETFs and doesn't want to be tempted, Vanguard doesn't allow them. My Vanguard account has options and margin enabled, and they still won't allow it. If ETFs are restricted, they're no longer ETFs - they can't trade freely on the stock market. So I'd favor keeping them, but also keeping the warnings put up when investors initiate a purchase at many brokerages.
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Count yourself lucky. Leverage funds at most likely ETN and not ETFs. Leverage funds only deliver the intraday returns and not the entire return on the investment. For example, if I stock closes at $100, then bad news is released and opens at $90, then closes at $91, the short leveraged holder will lose $1X(leverage) and not gain $9X(leverage). I've attempted to explain this, but usually just refer individuals read the prospectus (50+ pages) or call the provider to find out what the money is actually held from their investment (in a pool).
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Do you really want this idiot managing your money?
(https://i.postimg.cc/Nj8cD857/Capture.png)
CNBC still gives her 30-minute blocks to pump her garbage.
https://www.msn.com/en-us/money/markets/stock-market-faces-the-most-massive-misallocation-of-capital-in-the-history-of-mankind-says-ark-s-cathie-wood/ar-AAU0cf2?ocid=msedgntp
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Whether or not you think her funds are misguided, I'd hardly call Cathie Wood an idiot.
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She has been super successful at extracting money from investors, so I'd also not call her an idiot.
I'd never, ever invest in one of her funds. But that's because I know smart people mostly lose money trying to pick stocks just like dumb people.
-W
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I'm very comfortable calling her an idiot and a charlatan.
She got extremely lucky riding on the coattails of the epic Tesla runup, but there is nothing else in her track record to suggest that she can recreate the magic in a bottle another time.
Everything else she touches turns to shit. Last year, even with Tesla as her biggest holding solidly up and the wider market solidly up (in fact, in one of the easiest years you could ever imagine), she managed to lose a tonne of money. That takes some doing.
She think that if a company ticks her "innovation" checkbox then its an automatic buy, and it doesn't matter what price you pay for it. She doesn't seem to fundamentally understand that there is a world of difference between a good asset and a good investment. The quality of an asset isn't what determines if something is a good or bad investment, it's the the price you pay.
She outperformed in the run up simply because she was holding very risky high beta stocks. In a strong bull market, granted, you can expect to outperform with such stock selection. In a bear market you get crushed.
ARKK's 5 year Sharpe ratio is now running at a rather mediocre 0.9 vs 1.28 for the QQQ - ergo, you want a high risk play, you are better off just leveraging by your desired risk factor into the Qs.
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I would not give her my money.
But also there could be some misunderstanding/expectations mismatch. Investors thought that ARK is a vehicle to make money. Wrong. ARK is a vehicle to bet on very risky technologies / narrow stocks.
I'm ignoring here the fact that her bet had no chance to work well since she inflated small tech companies stock by throwing huge $ on them, creating a huge distortions. So, bad execution, no chance of making it working. Bad implementation. Also the cryptos...
Another thought I had about her. She made it clear that she is religious/god something. This explain the outcome: only the insiders made good money. Low ethics.
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Would i call her an idiot? Not fully. She is not much worse than other her peers. I would call her naive, just got lucky at some point in time.
I kind of respect her to sticking to her guns. Wait a second, this is a bad trait, she is not learning...
One thing stands out to me. She is so sure of herself that it is to me mind blowing. Like a cult leader that must be always sure.
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Most funds don't beat the market long-term.
This fund has not been an exception to this rule.
I used to be bullish on the fund but their dumping of PLTR and concentrating more on TSLA makes no sense to me from either:
1. Their thesis of '5-year horizon'. They are re-allocating way too much for their supposed long plays.
2. Diversification perspective. They say they want to concentrate more money on higher-conviction stocks when the market is bad....why? That makes a risky situation even more risky (you have to be a lot more correct about the rebound) and that's no longer investing in innovation, but investing based on market whims.
Some of the things they make sense to me but a lot of things are seemingly contradictory.
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These funds could essily get cut by three quarters imo.
Those recently piling in are the "buy the top" crowd who 12 months ago had never even heard of Cathie Wood.
Ask yourself do you really want to be buying with them? Suggest you google Janus fund for a lesson from history
(https://www.thestreet.com/.image/c_fit%2Ccs_srgb%2Cfl_progressive%2Cq_auto:good%2Cw_620/MTc0NjE1NzcyMTYzNzQ1NzM3/images-50.jpg)
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Still no sign of capitulation yet, as - unbelievably - ARKK continues to attract net inflows of $568m over the last month
https://etfdb.com/etf/ARKK/#fund-flows
As stupid and unconvincing as she sounds every time she gets airtime on CNBC, I guess her regular pep talks are required to keep the lemming buying
And her investors are just as stupid:
$16.5bn net inflows vs $12.2bn AUM means that the typical investor in ARKK is -27% under water
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If you feel that ARK funds will increase in value, you owe it to yourself to read this Twitter thread and consider it seriously.
I think the author makes an interesting and thoughtful case. Get both sides of the argument.
https://twitter.com/ttp_cap/status/1380634961594699776?s=21&t=4AzJ6J_G12nxO5rOuw4Jow
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If you feel that ARK funds will increase in value, you owe it to yourself to read this Twitter thread and consider it seriously.
I think the author makes an interesting and thoughtful case. Get both sides of the argument.
https://twitter.com/ttp_cap/status/1380634961594699776?s=21&t=4AzJ6J_G12nxO5rOuw4Jow
That's a great thread that taught me something about bull stampedes, the influencer economy, momentum investing, the politics of lying, and efficient markets hypothesis, all in a very compact format.
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If you feel that ARK funds will increase in value, you owe it to yourself to read this Twitter thread and consider it seriously.
I think the author makes an interesting and thoughtful case. Get both sides of the argument.
https://twitter.com/ttp_cap/status/1380634961594699776?s=21&t=4AzJ6J_G12nxO5rOuw4Jow
That's a great thread that taught me something about bull stampedes, the influencer economy, momentum investing, the politics of lying, and efficient markets hypothesis, all in a very compact format.
It makes sense with Wood's outrageous claims (Tesla to $3000!) but why hasn't it worked lately? Pretty much since that tweet was posted, ARKK has fallen. Was Ark screaming "Look at me, look at me" too much and people started ignoring it? Or has the money that would've gone into ARKK instead gone into crypto and NFTs and meme stocks?
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If you feel that ARK funds will increase in value, you owe it to yourself to read this Twitter thread and consider it seriously.
I think the author makes an interesting and thoughtful case. Get both sides of the argument.
https://twitter.com/ttp_cap/status/1380634961594699776?s=21&t=4AzJ6J_G12nxO5rOuw4Jow
That's a great thread that taught me something about bull stampedes, the influencer economy, momentum investing, the politics of lying, and efficient markets hypothesis, all in a very compact format.
It makes sense with Wood's outrageous claims (Tesla to $3000!) but why hasn't it worked lately? Pretty much since that tweet was posted, ARKK has fallen. Was Ark screaming "Look at me, look at me" too much and people started ignoring it? Or has the money that would've gone into ARKK instead gone into crypto and NFTs and meme stocks?
Some of my investments in Nov/Dec 2021 overlapped with ARKK, so I had a ring side seat to watch those stocks get beaten up. I would say most of the beat down is from the Fed's interest rate hikes, which you can see in the 1 year graph of ARKK's price. Since the Fed's policy does not favor these stocks, I don't own them now.
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No I have been short her fund for the last couple of years. If you look at her portfolio it is a collection of the worst non profitable bubble shitcos out there. Shorting her fund is a convenient way of sorting a basket of the worst, and collecting her excessive management fee on top.
Even owning tesla - which hasnt collapsed yet, hasnt saved her performance - it has been truly dreadful since last February.
Good luck.
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Here are ARK's holdings:
https://cathiesark.com/ark-funds-combined/complete-holdings
With few exceptions, her stock picking has sucked nuts. Most of her holdings are in deep loss territory. Her single noticeable success was Tesla.
Unfortunately, most of the investors who bought last year will likely NEVER get their money back.
Let's say lightning strikes twice and her 2nd biggest holding Teledoc, does a x10 over the next couple of years. That would take it from being a $1bn in net assets to $10bn. but TDOC is only 7% of the portfolio. A x10 would boost the overall portfolio by about 63%, but she needs roughly a 200% return to get back the the levels that many investors were buying at, so she needs lightning to strike another 3 or 4 times... how likely do you think that is? At the moment everything she is holding is going down.. it's the nature of these high risk stocks that most of them will fail. Realistically, most will continue to go down, and she'll need 6 or 7 Teslas to make up for all the ones that don't make it.
As a stock picker you get a Tesla once or twice in your lifetime. She got hers, and then proceeded to blow it on dross that will never come good.
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Nice work vand! I reread this entire thread and it seems to me you have been exactly right. I kind of feel bad for the ark investors but at least they were warned.
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Most funds don't beat the market long-term.
If you extend out the time horizon long enough, it's not merely difficult to beat the market, it eventually becomes mathematically impossible.
As a fund beats the market over time, it:
1) becomes a progressively larger part of the market
2) unless the managers close it to new investors, new money makes it a progressively larger fraction of the market, because investors will chase high-performing funds.
At T = infinity you can't beat the market, because if you beat the market continuously and don't have investors pulling their cash out (and why would they if you're beating the market), you'll eventually end up owning the entire market at some very long time horizon.
This is similar to the reason why Buffett/Berkshire Hathaway has been struggling to match its past returns in more recent years - when you get big enough you eventually reach the point that there just aren't enough sufficiently large outperformers left relative to the size of your portfolio for crushing the market to be a reasonable long-term expectation for a huge entity.
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TDOC -48% :D
She is certainly innovating new ways of losing money.
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I read this article today "Elon Musk, Cathie Wood Say Passive Funds Have Gone Too Far." It made me laugh but it also made me think of this thread.
https://www.bloomberg.com/news/articles/2022-05-05/elon-musk-and-cathie-wood-say-passive-investing-has-gone-too-far
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I read this article today "Elon Musk, Cathie Wood Say Passive Funds Have Gone Too Far." It made me laugh but it also made me think of this thread.
https://www.bloomberg.com/news/articles/2022-05-05/elon-musk-and-cathie-wood-say-passive-investing-has-gone-too-far
That was pretty comical. I don't feel too bad for folks who have jumped on and lost a bunch. One sad fact is that she (like others) continue to make a lot of money and thus can sustain for a long time. And then, she will make some move that is pure luck (even idiots get lucky...) and all the bad performance will be forgotten and a new set of victims will dump their money in. It's good work if you can get it, that's for sure.
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These funds could essily get cut by three quarters imo.
Those recently piling in are the "buy the top" crowd who 12 months ago had never even heard of Cathie Wood.
Ask yourself do you really want to be buying with them? Suggest you google Janus fund for a lesson from history
(https://www.thestreet.com/.image/c_fit%2Ccs_srgb%2Cfl_progressive%2Cq_auto:good%2Cw_620/MTc0NjE1NzcyMTYzNzQ1NzM3/images-50.jpg)
Mid-40 handle.
In real terms we are just about -75% now.
(https://y.yarn.co/d0c043c0-c5fa-4548-a259-d8854a954af9_text.gif)
I have to confess that even I am quite shocked at the rapid implosion that ARKK has suffered. It takes some special talent to underperform so badly, because it would be almost impossible to replicate this last 14 months just by picking stocks at random no matter how hard you tried.
The fact that ARK actually charges its investors huge fees with the promise of making them money while actually losing them money is a quite brilliant business model.
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This is interesting to read in retrospect. Especially love reading all the posts in 2021 and then corresponding the prices to them.
I was one of the people that put a small amount of my portfolio ($2000) into ARKK at the top when it was worth around $156. I knew nothing about the fund other than it was investing in "innovative and future thinking stocks". I thought it wouldnt hurt to diversify my portfolio a bit with such a thing. A few weeks later it had dropped to $120 I heard the Animal Spirits podcast warning about how people wernt going to be able to get out of the exits fast enough and I sold at around $125 In the end I am lucky to only have had a small amount of my money in it. I wish I had read this thread before hand. Another good lesson in not trying to be a stock picker, even with a little "play" money.
After that event I havnt bought or sold a single fund or stock, I've just stuck to my allocations and stopped checking my balances. I always do better when I ignore things. Like when I pulled out 1% of my portfolio at the bottom of the COVID crash to have on hand for "emergency spending money" because I was scared I might be layed off from my job due to budget cuts (which is pretty much the opposite of what happened in the months after that). I knew it was bad to react to the market in that way but I still did it.
This is just a word of warning for new investors - you always think you will be the rational actor, you tell yourself you have a strategy and you are going to stick to it, but when SHTF it is a lot more difficult than you think to act in such a way. Its best to really ignore any extreme events and hype in the market and be boring.
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This is interesting to read in retrospect. Especially love reading all the posts in 2021 and then corresponding the prices to them.
I was one of the people that put a small amount of my portfolio ($2000) into ARKK at the top when it was worth around $156. I knew nothing about the fund other than it was investing in "innovative and future thinking stocks". I thought it wouldnt hurt to diversify my portfolio a bit with such a thing. A few weeks later it had dropped to $120 I heard the Animal Spirits podcast warning about how people wernt going to be able to get out of the exits fast enough and I sold at around $125 In the end I am lucky to only have had a small amount of my money in it. I wish I had read this thread before hand. Another good lesson in not trying to be a stock picker, even with a little "play" money.
After that event I havnt bought or sold a single fund or stock, I've just stuck to my allocations and stopped checking my balances. I always do better when I ignore things. Like when I pulled out 1% of my portfolio at the bottom of the COVID crash to have on hand for "emergency spending money" because I was scared I might be layed off from my job due to budget cuts (which is pretty much the opposite of what happened in the months after that). I knew it was bad to react to the market in that way but I still did it.
This is just a word of warning for new investors - you always think you will be the rational actor, you tell yourself you have a strategy and you are going to stick to it, but when SHTF it is a lot more difficult than you think to act in such a way. Its best to really ignore any extreme events and hype in the market and be boring.
I don't think it is even that complicated - any action could be the best depending on furture outcomes, which are unknown. So making decisions for unknown events is a losing proposition. So best to have a blanket plan that covers most eventualities and you'll be good 98% of the time.
The 2% is pretty near impossible to plan around I think.
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I'm tempted to suggest after such a savage fall that we are reaching capitulation, but I see no sign of it yet in investor behaviour.
People are still buying into this tripe.
+$511m net inflows in the last week, and +$800m over the last month.
https://etfdb.com/etf/ARKK/#fund-flows
What was the saying about this being a definition of insanity?
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People are still buying into this tripe.
+$511m net inflows in the last week, and +$800m over the last month.
https://etfdb.com/etf/ARKK/#fund-flows
It's ... accelerating?!
I guess from their perspective it's just buying the dip? None of these investors were around for the global financial crisis. I wonder if they think all crashes are like March 2020, ending the year up +20%?
Back in Nov 2021 I bought some individual stocks that overlap with ARKK. Some may even be good buys if held 5 years... but a bear market with 7-9% inflation is not kind to companies that consistently lose money. These may have been growth companies in 2021, but they're shrink companies now.
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These two geniuses, eh?
(https://imageio.forbes.com/specials-images/imageserve/624f1066798458a0cb4992a3/MicroStrategy-CEO-Michael-Saylor-and-Ark-Invest-CEO-Cathie-Wood/0x0.jpg?fit=crop&format=jpg&crop=2021,1182,x11,y73,safe)
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Broken clock is no longer correct. The sooner ARK investors figure this out the better off they will be. She is the Henry Blodgett of this era, will never learn and keep saying the same thing until she writes her tell-all book 10+ years from now.
People mocked her for her early on-board Tesla investment too. Sure, no guarantee of success going forward, but also way too early to say she’s selling snake oil. Her funds are down over the last six months, who cares, she’s very clear that ARK invests on a 5 year horizon. Tesla went mostly sideways for years....until it didn’t. Those in then know that ignored the SP movement and focused on the company’s performance were rewarded. That’s the nature of investing in disruptive technology. No need to argue it though, let’s check back in a few years.
And that 5yr horizon is now a 4yr horizon since people piled in a year ago. 5 years is a very short period of time to setting expectations for your investors when most of your companies have never turned so much a a penny of profit.
On one hand you have Vanguard saying "do what we recommend and you should earn 3-4% for the next 10 years."
"On the other hand you have Cathie saying do what I recommend and you should earn 30-40% for the next 5 years."
Its possible both these could be accurate, but much more likely that one of them will be spectacularly wrong.
For all of Buffett and Munger's warts, they have never been stupid enough to start predicting their future performance, they always simply promise to do what best do is in their own power, which is to research and buy good companies at prices which provide a reasonable margin of safety based on the best estimate of the future cashflows of the business. They know how difficult it is to sustain even any positive excess return over time.
Someone who bought ARK-K Innovation Fund five years ago is up 390% on their investment. That’s a 78% annual return even after the recent drop! Same for ARK-G, if you bought five years ago, you’re up 309% or 61% annual return. Remind me again of the problem here? Let’s check in again in a few years because it's easy to kick ARK and Cathie when tech is dipping and ARK funds got overheated with new investors piling on. They were due for a retraction. Doesn’t mean Cathie is a fraud. Past performance suggests Cathie and crew know what they're doing. Wall Street analysts set price targets all the time, usually one-year targets. Not sure why Cathie is getting singled out for offering guidance for a five-year horizon. Much like with Elon/Tesla, it comes off as personal somehow.
According to MorningStar, ARKK's 5yr annualised return is 34.38%
Of course that's a fantastic return. Except that hands up anyone in the room who was invested with them back in Jan 2017? No? Didn't think so. It's easy to pick out fund AFTER they have grown and say "look how well the holders have done" but the reality is that nobody puts any sort of meaningful amount of money into a fund before it has had its stellar performance period. People pile into funds after they have had a massive run up.
What a difference not-quite-a-year makes.
The rolling annualized 5yr return has fallen from +34.38% at the start of the year to -4% today.
And now only a +400% return needed to get back to its Feb '21 peak.
At this rate you wouldn't rule out even Tesla sinking below her average buying price.
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So the moral of the story is we can’t judge the wisdom of an investment from its past returns?
We never figured out how to get that message through to people holding Bitcoin, Tesla, AARK, or COIN. It was utterly impossible.
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So the moral of the story is we can’t judge the wisdom of an investment from its past returns?
We never figured out how to get that message through to people holding Bitcoin, Tesla, AARK, or COIN. It was utterly impossible.
Personally I firmly believe that is just the way it has to be. The point of public capital markets is to efficiently allocate scarce resources, and for that to happen money usually has to be lost from the least productive areas, so the process might as well start by taking it from those who are the most careless and have such demonstrably little respect for money.
A private investor's first line of defence should always be: don't be a sucker. If you buy into hype, sorry, but you are a sucker.
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We never figured out how to get that message through to people holding Bitcoin, Tesla, AARK, or COIN. It was utterly impossible.
Fund managers are judged on AUM, and while ARKK performance has been terrible (-65% YTD), the outflows and inflows are roughly equal. That's a huge accomplishment, to not have massive outflows with that level of losses.
I think ARKK has further to fall as recession risk is priced in - I hold ARKK put options. But when ARKK and the S&P 500 finish crashing, which one has more potential for recovery?
I would caution ARKK holders that 2020-2021 was unique, and stocks like Zoom (ZM) may not see those valuations for a very long time. I don't think ARKK ($35.22/sh) can triple to $100/sh over the next few years.
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I bought a handful of shares of an ARK space fund (ARKX) as it seemed to be one of the few ways to get exposure to the space industry since SpaceX is private and the NASA contractors are all just giant defense contractors that are dinosaurs when it comes to the space industry.
Looks like it's down 42% since I bought - though Rocket Lab is down 68% since I bought a few shares of that around the same time (spring 2021). Fortunately, both investments were just a few hundred dollars I had sitting in a taxable account.
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I bought a handful of shares of an ARK space fund (ARKX) as it seemed to be one of the few ways to get exposure to the space industry since SpaceX is private and the NASA contractors are all just giant defense contractors that are dinosaurs when it comes to the space industry.
Looks like it's down 42% since I bought - though Rocket Lab is down 68% since I bought a few shares of that around the same time (spring 2021). Fortunately, both investments were just a few hundred dollars I had sitting in a taxable account.
Looked into it. Just found it funny it's holding John Deere. Space farming!
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Alright. Time for some critical reappraisal.
This thing is now printing with a 20-something handle - meaning that a holder from peak has suffered a -85% peak to trough real drawdown. Unbelieveable. Many holdings have suffered a -90% or worse peak to trough drawdown
But as we know in investing, that is all in the past and it is the future that counts. While my dim opinion of Cathie Wood has not changed in the slightest, I think we could be closer to the final lows than some perma bears may suspect. Net fund flows, while they have been positive over the whole of 2022 have been negative in the lasts 6 months, and especially in the last 6 weeks or so, indicating that many investors have reached exasperation and just want to get out - always a reassuring sign.
While I can't say that I have any confidence that ARKK won't fall further, such is its beta to the overall market, I think the risk/reward on offer for this type of long duration play is much better from these levels. Could end 2023 at $15 or $50 and neither would surprise me much.
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But as we know in investing, that is all in the past and it is the future that counts. While my dim opinion of Cathie Wood has not changed in the slightest, I think we could be closer to the final lows than some perma bears may suspect. Net fund flows, while they have been positive over the whole of 2022 have been negative in the lasts 6 months, and especially in the last 6 weeks or so, indicating that many investors have reached exasperation and just want to get out - always a reassuring sign.
While I can't say that I have any confidence that ARKK won't fall further, such is its beta to the overall market, I think the risk/reward on offer for this type of long duration play is much better from these levels. Could end 2023 at $15 or $50 and neither would surprise me much.
I think our highest-odds scenario is a recession lasting roughly 10-18 months starting in mid-or-late 2023 that will bring the S&P500 to a PE ratio of about 15-16 (in terms of 2022 earnings) compared to the current 20. That means I'm thinking in terms of "what do I wish I or my family had done in the 1991, 2000-2003, 2008-2009, and 2020 recessions/corrections?"
The answer in all four cases was "I wish I/we had bought tech stocks near the bottom." Tech stocks had the fastest growth after all four recessions, I believe. So according to this logic, ARKK might be just the ticket after everyone has given up on it.
However, what gives me pause is the speculative quality of many ARKK holdings. Many of their holdings were unprofitable in the best of times, are burning investors' cash now, and are dependent upon future cash infusions which will not be available during the recession*. I wonder if companies like TDOC, SHOP, or PD will be around in a couple of years. If a handful of ARKK companies turn into penny stocks, it will be hard for the fund's winners to make up for the loss, even if they multiply in value.
So if ARKK is the bleeding edge of speculative tech, it could be possible the maximum returns will be somewhere lower on the risk spectrum - sort of like how junk bonds aren't always the highest yielding bond class.
VGT and VUG, for example, concentrate on mature and highly profitable tech companies. QQQ is tech-heavy but lets the market do the weighting, while being less vulnerable to any one or two companies blowing up. VBK has a good chance of catching the next great small cap growth stock that becomes a big cap. Any one of these has a lower ER - in some cases 10x lower - than ARKK's 0.75%. That's a lot to pay for a portfolio of only 30 stocks in an era of commission-free trading. Why not just click "buy" 30x and not pay so much for Cathie to click "buy" for you?
It probably makes sense to pivot into tech/growth within the first 6-9 months of a recession, which translates to right about the time a recession becomes apparent in the unemployment and GDP data. Stocks can, and often do, rise through a recession unless there is a cataclysm like the Great Depression, GFC, or 2000 stock meltdown going on.
(https://imageio.forbes.com/specials-images/imageserve/62376233789583c3588ab900/Stock-Performance-2-years-after-a-recession-began/960x0.jpg?format=jpg&width=960)
Source: https://www.forbes.com/sites/kristinmckenna/2022/04/01/how-stocks-perform-before-during-and-after-recessions-may-surprise-you/?sh=2b2fef1f249d (https://www.forbes.com/sites/kristinmckenna/2022/04/01/how-stocks-perform-before-during-and-after-recessions-may-surprise-you/?sh=2b2fef1f249d)
*Yes, I am aware of how growth companies manage negative earnings to avoid tax liability, and I am aware of the value of R&D / marketing investments early in a company's trajectory, but to some extent that might not matter when the SHTF.
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But as we know in investing, that is all in the past and it is the future that counts. While my dim opinion of Cathie Wood has not changed in the slightest, I think we could be closer to the final lows than some perma bears may suspect. Net fund flows, while they have been positive over the whole of 2022 have been negative in the lasts 6 months, and especially in the last 6 weeks or so, indicating that many investors have reached exasperation and just want to get out - always a reassuring sign.
While I can't say that I have any confidence that ARKK won't fall further, such is its beta to the overall market, I think the risk/reward on offer for this type of long duration play is much better from these levels. Could end 2023 at $15 or $50 and neither would surprise me much.
I think our highest-odds scenario is a recession lasting roughly 10-18 months starting in mid-or-late 2023 that will bring the S&P500 to a PE ratio of about 15-16 (in terms of 2022 earnings) compared to the current 20. That means I'm thinking in terms of "what do I wish I or my family had done in the 1991, 2000-2003, 2008-2009, and 2020 recessions/corrections?"
The answer in all four cases was "I wish I/we had bought tech stocks near the bottom." Tech stocks had the fastest growth after all four recessions, I believe. So according to this logic, ARKK might be just the ticket after everyone has given up on it.
However, what gives me pause is the speculative quality of many ARKK holdings. Many of their holdings were unprofitable in the best of times, are burning investors' cash now, and are dependent upon future cash infusions which will not be available during the recession*. I wonder if companies like TDOC, SHOP, or PD will be around in a couple of years. If a handful of ARKK companies turn into penny stocks, it will be hard for the fund's winners to make up for the loss, even if they multiply in value.
So if ARKK is the bleeding edge of speculative tech, it could be possible the maximum returns will be somewhere lower on the risk spectrum - sort of like how junk bonds aren't always the highest yielding bond class.
VGT and VUG, for example, concentrate on mature and highly profitable tech companies. QQQ is tech-heavy but lets the market do the weighting, while being less vulnerable to any one or two companies blowing up. VBK has a good chance of catching the next great small cap growth stock that becomes a big cap. Any one of these has a lower ER - in some cases 10x lower - than ARKK's 0.75%. That's a lot to pay for a portfolio of only 30 stocks in an era of commission-free trading. Why not just click "buy" 30x and not pay so much for Cathie to click "buy" for you?
It probably makes sense to pivot into tech/growth within the first 6-9 months of a recession, which translates to right about the time a recession becomes apparent in the unemployment and GDP data. Stocks can, and often do, rise through a recession unless there is a cataclysm like the Great Depression, GFC, or 2000 stock meltdown going on.
(https://imageio.forbes.com/specials-images/imageserve/62376233789583c3588ab900/Stock-Performance-2-years-after-a-recession-began/960x0.jpg?format=jpg&width=960)
Source: https://www.forbes.com/sites/kristinmckenna/2022/04/01/how-stocks-perform-before-during-and-after-recessions-may-surprise-you/?sh=2b2fef1f249d (https://www.forbes.com/sites/kristinmckenna/2022/04/01/how-stocks-perform-before-during-and-after-recessions-may-surprise-you/?sh=2b2fef1f249d)
*Yes, I am aware of how growth companies manage negative earnings to avoid tax liability, and I am aware of the value of R&D / marketing investments early in a company's trajectory, but to some extent that might not matter when the SHTF.
Right. So I think what you're saying is that.. the recovery will not just mirror the decline. The stocks that lead us up won't be the ones that have got crushed, at least not all of them. Different sectors will be the place to be, and its quite possible that tech will be a lousy place to be for a longer time than anyone suspects.
I think that's a sensible logic - if everything just goes back to the way it was then nothing really has been fixed, has it?
The cycle tends to start with people only wanting to invest in bluechips and value orientated stocks, but as the recovery develops they become more speculative and start to go crazy on growth and hype stocks. But that only really happens after the market has been crushed and there is a sea change in sentiment. I don't think we're at that stage yet - people need to believe that the hot plays of the last cycle are dead.
No idea on the timing of the recession tbh. This will be the most widely anticipated recession of all time if it happens, so I would expect it to also be the most front-run recession too. From a personal point of view, the good lord willing, I have my regular savings going into the market over the next year and would not mind another year where I can accumulate cheaper stocks.
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Do you really want this idiot managing your money?
She's a troll. No, seriously. She's trolling investors.
If you think those comments were crafted from the basis of research then you and I strongly disagree. She's married to her thesis and like the captain of the Titanic, she's not taking a lifeboat out.
With the proliferation of niche funds/ETFs I wonder how the compensation packages motivate the managers. It would be stupid to compensate someone for beating a dead horse but isn't Assets Under Management an import compensation factor?
The facts of a prospectus are more valuable than a fund manager's opinion. Her comments are now meaningless and quickly forgotten by some who continue to believe. We live in the age of trolls. Trolling works or they'd stop.
Any opinion of ARK should be based on outside analysis and history suggests a rebound(which will likely happen - might be a debatable point) will not likely be worth the wait.
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Do you really want this idiot managing your money?
She's a troll. No, seriously. She's trolling investors.
If you think those comments were crafted from the basis of research then you and I strongly disagree. She's married to her thesis and like the captain of the Titanic, she's not taking a lifeboat out.
With the proliferation of niche funds/ETFs I wonder how the compensation packages motivate the managers. It would be stupid to compensate someone for beating a dead horse but isn't Assets Under Management an import compensation factor?
The facts of a prospectus are more valuable than a fund manager's opinion. Her comments are now meaningless and quickly forgotten by some who continue to believe. We live in the age of trolls. Trolling works or they'd stop.
Any opinion of ARK should be based on outside analysis and history suggests a rebound(which will likely happen - might be a debatable point) will not likely be worth the wait.
Are you a SARK investor?
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Do you really want this idiot managing your money?
She's a troll...
Are you a SARK investor?
No. I'm not an inverse investor. Kudos to those who make it work.