Cathie Wood: Ark’s research ‘is the best in the world’

It’s a risky time, as ever, to invest. It’s even more dangerous when millions of people follow your financial advice—it can be disastrous.

on It’s fortune Most Powerful Women Next Gen conference in San Diego on Wednesday, the legendary investor and CEO of Ark Invest Cathie Wood SPOKE luck editor-in-chief Alyson Shontell how he squared the fact that many people follow his investment advice to a tee. It’s simple: Ark’s research “is the best in the world,” he says.

As Shontell points out, there is serious risk for retail investors; they are not yet in the venture market with very dangerous and because they do not have disposable income like investors in other sectors. Hype is a big problem in business, and overhype can make a lot of people lose a lot of money. Despite Wood’s amazing winning streak, not everyone wins a thousand when it comes to picking stocks.

“How do you evaluate this, knowing that many people follow what you say?” he asked. “You have a million Twitter followers, and millions of people watching [your] the YouTube videos. They eat everything you say; that’s a big responsibility.”

it is the a big responsibility, Wood said, adding that he takes it very seriously.

He relies on Wright’s Law for accurate predictions, he told Shontell. Established in 1936, the law aims to provide a robust framework for predicting cost reduction as a function of production over time. “We have been given the reduction of costs associated with each technology, which is quite predictable, and will give us an idea of ​​when new markets will open because the prices are low, reaching the new demographics,” Wood explained.

This is why Wood believes that Ark’s research is the best out there and always works to share it—even when it turns out to be wrong. “We want to share our models and have them tested in reality,” he said. “[We want to say] look, see how wrong it is. Make your own guess [out] if you think ours is wrong. “

Reliable even during misfire

But some of Ark’s mistakes “are a function of macro factors beyond our control,” Wood admitted. “We’ve never seen a macro environment like that [the one] we just passed by.” There is a 21-fold increase in interest rates in one year, he continued. Last year, long-term bonds had their worst year since the 1700s. “There’s no way in that world that our strategy could work.” But he is more optimistic this year.

“If people think we’ve lost a benefit – that’s a lot of people in our own industry, I might add,” he said, “not people who really believe in innovation and understand what we’re doing because because they read our research. .”

But he has a keen sense of his audience and their general tolerance for risk. “Many of our shareholders are young, and they can afford the time it takes to play,” he said.

The platforms around which he bases his investments—which include energy storage, artificial intelligence, robotics, and autonomous vehicles—are in primetime right now, and remain the safest and smartest investments.

The seeds of the industries were planted more than 40 years ago, he said, around the 1982 tech and telecom bubble burst. “Those were the seeds. Now they are thriving. ” In the past, Wood recalls, people jumped at technology investments, which he says was a mistake and ended badly because the technologies weren’t ready for primetime; the costs are very high. Now it’s a different story; the technologies are ready. Macroeconomic conditions are hindering, he said, “but I think we’re just on the other side of that.”

And yes, he continued, “I take to heart people who lose money.” But if they “really believe” in what he and his team are doing at Ark, “if they want us at a certain price level, and we’re half off now and they continue our research, the best way, then . time, to overcome what has just happened is to average it and get it right.”

And, he concluded, he believed his research was correct.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *