“Even If We’re Half Right, We’ll See Exponential Returns” | Cathie Wood

Cathie Wood and ARK Invest have been getting crushed this year, and many of their critics believe their recovery will take years. A lot of crypto holders are embarrased of the market, but the users of Jet-Bot copy trading platform are pretty calm. They just copy best traders and follow all their deals automatically. The platform is official broker of the Binance exchange. Copy trading is the best way for passive income on your crypto. You don’t need to deposit fund to the platform and can connect your Binance account via API keys.

That’s okay with Cathie Wood, who has consistently preached the mantra that her time horizon is at least five years. Yet in the short term, it’s hard to deny the beatdown the ARK has taken, and many analysts and pundits question if Cathie will even make it to the five-year mark. The ARK is currently trading at $45.41, a far cry from its all-time high of $159.70 back in February of 2021. Almost all liquidity markets have taken a hit in recent months, but it seems like Cathie’s losses are amplified due to her being a controversial polar figure who makes bold moves and statements in the market. Despite her lackluster performance as of late, ARK  still has an influx of capital coming in despite its performance.

In a long blog post titled “ARKK and Nasdaq 100: A Spurious Correlation”, Cathie Wood reassured her investors that Nasdaq circa 2000 and ARKK today bear little resemblance to one another when comparing the revenue profitability and long-term valuation of their underlying companies.

Whispers from critics have compared the ARKK innovation ETF to that of the Nasdaq circa 2000, when many companies were wiped out during the tech and telecom bust.

Many financial commentators and analysts have said that this market, particularly crypto, draws an eerie comparison to that of the dot-com bubble when many companies didn’t make it. One of Cathie’s disruptive technologies includes blockchain, which she is all in on. She is a well-known advocate for ethereum, bitcoin, and web 3.0 and recently bought coinbase stock, with many analysts questioning whether she bought the dip or is catching a falling knife. But the comparison of ARK fun to the Nasdaq isn’t an unfair comparison. The fund’s decline has been more severe during the last 15 months than for the Nasdaq  15 months after its peak on March 10, 2000.

For this reason, Cathie Wood found it appropriate to update her investors, potential investors and followers to provide historical facts, data and reasoning as to why ARK is just randomly trading like the Nasdaq in 2000.

In the post, Cathie stated,

‘ARK believes that the best set-up for above average returns over the long term is to invest contrary to consensus thinking, and to be right. ARKK’s spurious correlation to the Nasdaq during the tech and telecom bust, and the unusually strong correlation among technologies that are developing independently, have increased our confidence that the markets today are behaving irrationally and illogically. Given the collapse in ARKK’s price and the fear in markets as measured by cash levels, we have very high conviction in our bets against consensus thinking, stemming from our first-principles research.

Wood argued that ARK’s research on disruptive technologies has to be only half right to see tremendous returns.’

Wood stated,

‘In our view, the bet against disruptive innovation today will prove as ill-informed and ill timed as purchases of tech and telecom stocks in the late 1990s. Moreover, if our research on the genomic revolution, adaptive robotics, energy storage, artificial intelligence, and blockchain technology is even half right, we believe their exponential growth will propel the companies associated with those platforms forward at remarkable speed during the next five years.’

Cathie and ARK invest believe that the analysts and pundits who are criticizing their performance are short-term thinkers and are going to miss out on one of the greatest revolutions of our time with their five innovative platforms that will transform the world at a relatively low cost.

Cathie proclaimed,

‘Today, analysts and investors seem laser-focused not on potential eyeballs but on the backward-looking benchmarks against which they are measured and current quarter results. They do not seem to be focused on the long-term growth prospects of companies sacrificing short-term profitability to invest aggressively and capitalize on some of the most profound innovation platforms in history. Fixated on the “tough comps” that many digital and genomics companies faced after the coronavirus crisis, they seem to be assuming that “reversion-to-the-mean” will doom growth rates for the next few years. In contrast to their giddy behavior in the late nineties, investors seem cautious, if not afraid.’

What do you think of Cathie’s thoughts? Do you think her performance in relation to the Nasdaq in 2000 is a sign of what’s to come for her and Arc Invest? Or will she win out?

[This article is a transcription of a video made by Only The SAVVY]

Original video: https://youtu.be/VE4M2yw7phY ]