The ARK Innovation ETF managed by Cathie Wood has had a miserable performance in 2022. $ARKK @CathieDWood has destroyed many small investors. You need a miracle to just break even, but don’t worry, Ms. Wood has your 0.75% a year. With Arkk down 70% this year, you need 233% gain next year to break even, do you feel lucky?
‘The drop in ARKK assets, from $27.9bn in February 2021 to $6.4bn today, was purely driven by valuation decreases in its portfolio of investments: overall the ETF has actually hoovered up $1.4bn in new client money this year, as investors bought the dip.’
Cathie Wood pointed out a positive aspect of the difficult period her exchange-traded funds endured in 2022. She explained in an interview with Bloomberg TV on Tuesday that she had incurred over $2 billion in losses from selling stocks during the market downturn, which can now be used to reduce future tax bills on gains. By selling stocks at a loss, those losses can be utilized to potentially offset any taxes that may be owed on capital gains by Wood’s funds in the future.
How the financial media gives Cathy Pollyanna Wood continued airtime is beyond me. Lost $10 billion in investor capital, while earning $300 mill in fees with her wild proclamations as seen her silver-lined rose-tinted glasses. Stop giving her oxygen.
That’s the bad part and we can’t let $ARKK get out by just being “idiots” or “wrong”. As financial “professionals” they knew better than the absurd price targets and deranged theories they threw around. What they did was fraud and fleecing novice investors for their own gain.
The adulation and attention that was heaped on Cathie Woods was really baffling, more so when you consider her performance (or lack thereof). There are hundreds of money managers that are mediocre, but marginally better than her that get no where near the press coverage.
In 2021, during the stimmie check/Robinhood/GameStop phase, people were hanging to her every word as though she was the next Warren Buffet. In hindsight, some of these investors needed to learn a lesson about the perils of not doing your own research, lack of diversification and accepting a stranger’s word as gospel.
Everyone (and their grandmother) is a genius in a bull market.
As of July 2023 if you look at the inflows and outflows over time chart, the fund has received a total of about $17B in inflows, issued $3B in outflows for a net $14B invested. It now has a value of $7B meaning over the life of the fund, Woods has lost half the money that was invested with her, while collecting over $200M in management fees according to that chart. That tells you all you need to know about Woods and ARKK.
In a bear market, Cathy’s stocks lose more than the market; and in a bull market, her stocks gain more than the market.
Between Dec 30, 2022 and July 14, 2023 – ARKK went from $31.24 to $48.57! (55% increase). (S&P 500 is up 17%)[ARKK lost 66% in 2022 / S&P500 lost 19%]
ARKK’s excesses (in either direction) as compared to the S&P500 is the hallmark of high beta stocks in ARKK’s portfolios.
Wood thinks she and only she can find all of the first adopters that will be long term winners. History shows that most first adopters fail and it is refinement and lessons learned about the demise of first adopters by subsequent adopters that carry the day. MSFT didn’t have the first computer operating system. Can anyone name that first adopter?
According to Cathie Wood, she is “following the will Of God” with Ark.
So, she asks her investors to just “have faith”.
Her latest book, “Faith Driven Investing”, described by the publisher as follows:
“invest in God’s purposes for this world! Join the awakening movement with other believers, view your investments from God’s perspective, and learn how to steward your finances for his kingdom. Each book includes access to the 8-video series, a discussion guide, and an invitation to join like-minded investors”
Come on guys, for those of you that have lost money, just have “faith”. You are doing God’s work!
I wish I could understand why any long term investor would buy ARK when they can buy a passive index fund that gives you almost exactly the same exposure, with better returns, less volatility, and not have to pay for Cathie Wood and her entourage’s salaries. Take Vanguard’s VGT just as an example. Over the last 10 years VGT has returned 20.52% vs. ARKK’s 11.77. It also has had less volatility – VGT has been 4.52% vs. ARKK’s 10.61%. It is also less costly – VGT’s expense ratio is 0.10% vs. ARK’s 0.75%. I’m sure I could find other passive funds with similar results. What do these fund managers such as Wood actually do and why do people pay them? I could collect investor funds into my personal technology index fund, watch football all day and do zero work for 10 years, and could earn better returns on investor money than Cathie Wood does. Where am I going wrong here?
The fund remains a cash cow for Wood, who owns a majority stake in its parent company, ARK Investment Management. Its 0.75% annual fee is about double the average fee for active ETFs. Cathie lowers your RETURN, but she does not lower your RISK.