• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Cathie Wood

Jkca1

Supporting Member
DP Veteran
Joined
Aug 10, 2021
Messages
1,269
Reaction score
955
Gender
Male
Political Leaning
Independent
Is Cathy going to be the one that stands out in economic history positively or is she going down in flames? I watched an interview with her the other day and she was very sharp, which you would expect. She said something that struck me odd. She said that she has "experts" looking after specific markets and they help her decide which tech companies are going to have a much larger than normal 5 year growth. It occurred to me to ask, did those same experts see that tech would drop after the pandemic furor started to fade? If not why not? If they didn;t then how trustworthy are they? If they did, why didn't Cathie drop some boat anchors stocks when she had the chance?
 
Is Cathy going to be the one that stands out in economic history positively or is she going down in flames? I watched an interview with her the other day and she was very sharp, which you would expect. She said something that struck me odd. She said that she has "experts" looking after specific markets and they help her decide which tech companies are going to have a much larger than normal 5 year growth. It occurred to me to ask, did those same experts see that tech would drop after the pandemic furor started to fade? If not why not? If they didn;t then how trustworthy are they? If they did, why didn't Cathie drop some boat anchors stocks when she had the chance?
Those two things are not related.
 
I wrote the following about Wood on a subreddit a few days go. It got absolutely no traction whatsoever. What is typical is that people pile into a volatile hot fund, but the moment it begins to underperform the impatient people who are going for the hot hand start grumbling. But rarely have a seen someone go from Wall Street darling to bum as fast as this woman has. I would just look at her long-term record, and that is actually pretty damn good. The thing about the sort of growth investing she does is you don't need more than a handful of stocks to carry the rest of the portfolio. If you take 10 stocks and only two of them explode the fund will be a winner. So while I think her funds could sustain more losses in the near term, anyone averaging in over, say, the next year or so will be looking good in a few years.

Okay, since I’m the contrarian value guy and it’s Let’s Kick the Woman in Her Imaginary Nuts While She’s Down Day, I’m going to play the Devil’s Advocate and defend Wood.

First of all, this woman is not stupid. She graduated summa cum laude with a degree in finance from USC. She’s been in the investment management business since 1977. She rose in a cutthroat, results-driven field filled with male egos and testosterone to become a global CIO at AllianceBernstein, where she managed a $5 billion portfolio at a time when $5 billion was still real money. She chucked a nice, cushy career at Alliance to start an innovative firm in managed ETFs at a time when virtually no one in the industry thought the concept had merit. So, as reasonable people, let’s agree that: 1) she’s not a moron; 2) she has an ability to think outside the box; 3) this ain’t her first rodeo.

Now, let’s also understand that the firms she invests in are, in many instances, young, immature, but, in her conceptual mind, innovative in some way. She’s asking that you give her five years. Every investment style has its moment in the sun. In one sense Cathie Wood is sitting in the same roasting seat Don Yacktman and Bill Nygren were sitting in at the dawn of the new millennium. After years of seeing stocks like Cisco Systems and JDS Uniphase trounce their funds, some investors wanted to crucify these guys and were abandoning their funds in droves. Then came the Dotcom bust, their fortunes revived, and they went from being zeroes to heroes once again.

Now, imagine it’s 2002 and you had been an investor in a tech fund and for the last excruciating year had been handed your guts after being invested in firms like Amazon.com, Flir Systems, and Broadcom. The fund manager was imploring you to told hold on, but you decided to pick up your marbles and put your money in Savings Bonds instead. You swore to yourself you never wanted to see another money-losing tech stock again. In that scenario who would be the moron today? All I’m asking you to do is take a step back, remove yourself from the crowd mentality that loved her then but hates her now, and reflect on whether or not her approach has merit for the longer run. I, for one, would never sell her short.

I have a feeling she’ll be back, and sooner rather than later. I tend to agree with her thesis that deflationary forces built on massive levels of debt, not inflation, are the greater threat to our economy, which should tend to make her stocks more valuable relative to slower-growing companies. That’s what long-term bond yields and a flattening yield curve are whispering to us. We would be wise to listen.
 
I wrote the following about Wood on a subreddit a few days go. It got absolutely no traction whatsoever. What is typical is that people pile into a volatile hot fund, but the moment it begins to underperform the impatient people who are going for the hot hand start grumbling. But rarely have a seen someone go from Wall Street darling to bum as fast as this woman has. I would just look at her long-term record, and that is actually pretty damn good. The thing about the sort of growth investing she does is you don't need more than a handful of stocks to carry the rest of the portfolio. If you take 10 stocks and only two of them explode the fund will be a winner. So while I think her funds could sustain more losses in the near term, anyone averaging in over, say, the next year or so will be looking good in a few years.



I wish I was aware of that subreddit. It's not just her stocks were under performing, it's the percentage they are under performing. I owned Meta at 246, sold it and then bought it again at 214. It's at 206 today but I can live with that risk. Had I owned Peloton I would have dumped it in the 120's ago because I knew, like many others it was riding the pandemic wave. I think Cathie's credibility took a hit when she didn't sell parts of her portfolio. If you claim to know the future but can't see the present that is an issue. Her claim that she KNOWs her stocks are going to have a 15%+ yearly gain are based on lip service not averaging.
 
I wish I was aware of that subreddit. It's not just her stocks were under performing, it's the percentage they are under performing. I owned Meta at 246, sold it and then bought it again at 214. It's at 206 today but I can live with that risk. Had I owned Peloton I would have dumped it in the 120's ago because I knew, like many others it was riding the pandemic wave. I think Cathie's credibility took a hit when she didn't sell parts of her portfolio. If you claim to know the future but can't see the present that is an issue. Her claim that she KNOWs her stocks are going to have a 15%+ yearly gain are based on lip service not averaging.
She's not a market timer. No one knows the future.
 
She's not a market timer. No one knows the future.
"if we’re right are going to move from being valued in the equity markets, public equity markets, at $10 trillion to roughly $210 trillion within the next eight years. That’s a 46% compound annual rate of return." that is a direct quote from Cathie but she does use the word "if", what a vote of confidence that must give investors....
 
She's not a market timer. No one knows the future.

One wouldn't know that judging from the number of Chicken Littles arguing that the sky is falling. Maybe it is for ARKK investors and other folks heavily concentrated in money-losing tech stocks, but, fortunately, most of my money is invested in boring but highly profitable segments of the market, like drugs and energy.
 
"if we’re right are going to move from being valued in the equity markets, public equity markets, at $10 trillion to roughly $210 trillion within the next eight years. That’s a 46% compound annual rate of return." that is a direct quote from Cathie but she does use the word "if", what a vote of confidence that must give investors....

Well, I never thought Apple would have a market value twice the size of Russia's GDP. So who am I to say she's wrong?
 
Well, I never thought Apple would have a market value twice the size of Russia's GDP. So who am I to say she's wrong?
That's fair. I will check back with you in 5 years and we can talk about what actually happened with arkk. ;)

60.88 at close today.
 
Back
Top Bottom