Warren Buffett is often compared to Cathie Wood of the "female version of Buffett," and strictly speaking, they may have only one philosophy similar: "No one wants to get rich slowly." ”
Indeed, "Wooden Sister" Wood is as wealthy as an upstart. When Koi was in favor, the 2020 annual returns of the 5 ETFs under Wood Management ARK Invest exceeded 100%, representing that the product ARKK achieved nearly 150% of the ultra-high return, and the wooden sister was promoted to the first sister of Wall Street, and the limelight even overshadowed Gülen in the same period here.
After the good fortune dissipated, the Ark overturned collectively in 2021, with 4 ETFs falling by more than 20%, and ARKK falling to a miserable 55.54%. Wood Sister almost erased all the gains since 2020, intersecting with Buffett's two-year performance net worth curve at one point, and the doubts of the "logging army" swept in. Michael Burry, the prototype of "Big Short", directly shorted the ARKK, and the $31 million put position was like the sword of Damocles hanging above the wooden sister.
ARKK drawdown rate history Source: Portfolio Labs
How much praise from the bull market is as much as it has to withstand the vilification of the tide, and Wood has been insulted as much as the "gambling dog" label. During these dark days, Lisa Shalett, Wood's former boss and chief investment officer at Morgan Stanley Wealth Management, gave her a neutral assessment: she was good at spotting investment themes and winners and losers, but the biggest blind spot was the management of risk and volatility.
Therefore, putting aside the various Bablovian pulls in the current market, from a neutral point of view, is the wooden sister still OK?
01
"Waterloo" rebuttal
Summarizing the voices of the market questioning The wooden sister is actually today's macroeconomic background, which will limit the development of growth stocks.
Watching the Federal Reserve continue to quantitatively easing, US inflation continues to rise, and the soaring demand for new energy vehicles is about to lead to an increase in commodity and raw material prices, it is difficult for the public not to believe that inflation will continue. This will hit the growth enterprises that Wood Sister likes.
U.S. inflation continues to rise Source: Statista
Dennis Gartman, the "king of commodities," also advises steering clear of tech stocks that wood and others have already opened: "Their days are quite difficult now, and the days in the coming months will be even harder... U.S. stock investors have enjoyed high valuations for a long time during the COVID-19 pandemic..."
But where there is an economic topic, there is debate. Without any panic, Sister Wood directly carried out the first layer of rebuttal in the december 2021 public report - inflation falsification, she said:
As the epidemic gradually improves, supply chain bottlenecks are removed, consumption growth will slow down significantly, which will lead to deflation, and according to the law of Lai (every doubling of production, costs will fall at a steady rate, then prices will fall, and release a wave of exponentially growing demand), benign deflation will lead to cost reductions, and companies on the right side of change will have super-high growth.
What's more, commodity prices are already falling, and china's housing is not speculated, which means that cost-driven inflation is not very serious [2].
In response to the concerns of the "bear market", as a second-level rebuttal, Wood Sister also indicated that it would make the portfolio more diversified, and the top ten positions of ARKK accounted for 42.61%, which was lower than that of many top-tier fund managers in China. Moreover, with the exception of Tesla, the stocks held by the Ark are usually not in the range of the index, or the weight is very small, so when others sell the stocks held by the Ark, it is also highly likely to mean that they are in the range of the index.
It is only more embarrassing that the performance of ARKK last year did reverse, with the standard 500 rising by as much as 27% in 2021, while the "specialized special new" Proto Labs, Skillz, and Berkeley Lights held by Wood Sister have fallen by more than 70%. But it is also difficult to prove that the value of these "little giants" can be discovered when the US stock market collapses.
Wood sister positions are scattered, but a lot of waist chopping Source: FT
Unlike the mainstream impression of The Wood single-bet track, the Wooden Sister flagship fund is fragmented and focuses on five innovative areas: DNA sequencing, robotics, energy storage, artificial intelligence, and blockchain technology. Wood believes these five innovation platforms will disrupt every industry, every company in the world, and truly change the way the world works.
And at this point, it was the time when Wood sister said that "disruptive innovation" was the most, as Baillie Gifford star fund manager James Anderson described in her retirement letter, "the new ideas needed now are far beyond what Alice said in Wonderland, 'think about six things that can't happen before breakfast.'" ”
Now is the era of the most opportunities for transformative innovation Source: Ark Invest
And this is the third layer of rebuttal, Wood Sister believes that the innovation stocks she holds have no bubbles and are in the deep value area. In her context, as long as the respect and sensitivity to innovation are maintained, even if the position diversification has the potential to outperform the index significantly.
This also seems to echo public concerns about the growing scale of Ark investment. Although before the outbreak of the epidemic, ARKK's capital size never exceeded $2 billion, and it was able to buy and sell almost any type of small stocks in a low-key and free manner, But Mu today gave investors an explanation with the guarantee of maintaining diversity:
Inflation? bear market? overrate? All overturned, $42.4 billion AUM, the old woman is not afraid.
02
Transparent policies
Sister Wood's enthusiasm for conveying her ideas through social networks is reminiscent of the US president who was impeached a year ago.
Bitcoin's contribution to Wood's performance is almost second only to Tesla, relying on this calf-guard mentality, she once took the research report "Debunking the Bitcoin Myth" and publicly called Out Goldman Sachs on Twitter:
You say that Bitcoin cannot be used as a store of value, and I explain to you how listening to its real fluctuations highlights its monetary policy credibility; you say that Bitcoin is a bubble, I say it has the potential to be a global currency; you say that Bitcoin will lose the value of digital copies, and I prove that the value of showing you it can not only be copied by software; I also want to tell you that Bitcoin is censorship-resistant and more effective in terms of energy consumption than gold and traditional banks...
The collision of each point of view, afraid that the Twitter melon-eating masses will not understand, carries easy-to-understand text notes and data charts. Even when Wood sold 0.26 percent of ARKK's stake to buy a stake in Coinbase, she has always been in line with her word for the support of cryptocurrency trading and innovation.
At Morningstar's annual investment conference 2021, Wood also openly confronted Tesla with Rob Arnott, the godfather of Smart Beta and managing $170 billion Research Affiliates.
Wood Sister vs Arnold Remote Spray Site
Arnottelli believes disruptors are disrupted, and of the 10 largest companies at the height of the bubble in 2000, Microsoft was the only one that outperformed the market over the next 20 years. "We've seen countless disruptors in the dot-com bubble that have fundamentally reshaped the way we communicate, the way we transact, and the way we interact with our customers, and the market is expecting amazing growth... I think 50% growth is incredible[3]. ”
In this regard, The wooden sister directly counterattacked: look forward, do not look backwards, the real technology bubble will not be like now, asking more risks than asking opportunities. In 2019, Ark Investments used 34 variables to do Monte Carlo model calculations, and after 40,000 simulations, it is expected that by 2025, Tesla's stock price will eventually rise to $3,000[7]. As a base, Wood Sister uploaded the model to Github for everyone to test.
ARK uploads to Tesla's valuation model on GitHub
Of course, Sister Wood is not just talking in response to market questions. Her sincerity is also reflected in her undisguised favor for the Chinese market. Although she is an American, Mu Toujie concentrated on praising China in many ways in 2019: China can lead the artificial intelligence economy, China has pointed out the direction for digital wallets and mobile payments, and China is at the forefront of immunotherapy research, especially CAR-T...
Recently, Mu Toujie also spoke on Twitter with a picture: China is a leading indicator of consumers' changes in preference for electric vehicles. In China, sales of fuel vehicles actually fell by about 4%, while sales of battery electric vehicles increased by about 145%.
Wood Sister will also bring out some unclear information in the company's report to share with investors. Last year, Ford claimed to double the mass production of the F-150, but only 2%-3% of their revenue is electric vehicles, and the vast majority of the remaining are fuel vehicles, so the capacity supply of new energy vehicles is unknown. In the future, Ford may add a lot of leverage, and even trigger a credit crisis.
At the same time, Wood Sister pointed out the bubble in the US used car market. "In the U.S., used car prices fell 1.2 percent year-over-year, revenue fell 4 percent year-over-year, not to mention a 26 percent increase in the average number of days spent in used car inventory, and garages were about 40 percent higher than normal in terms of wholesale and retail." Wood Sister used data to severely approve the second-hand car market in the United States [6].
And this grounded explanation comes from The Wood Sister's interview with YouTube. Wood does not shy away from frequent appearances and encourages investment managers or research executives to go out and explain on behalf of the company, and the research reports they have written are prominently displayed on the official website.
"Our analysts speak on social media such as Twitter, LinkedIn, Medium, Telegram, and it's more fun for young people to communicate[4]."
As long as you want, you can subscribe to The Wood Sister's email for free on the ARK official website. Wood sincerely hopes that investors can understand the investment philosophy of Ark and the investment logic of each field, so that investors can get strength in the opposition of the market.
Wood knows that his strategy fluctuates a lot, and with his sincerity and strategy transparency, it may be a way to protect customers who match his investment philosophy.
03
Sister Wood understands the long-term doctrine
No matter how hard sister Wood is, how sincerely and boldly she opens her ideas, the market voice is still unfriendly to her. The ETF that "works against" arKK, the Tuttle Capital Short Innovation ETF (SARK. US), which has now amassed $234 million in assets, is less than three months old and has a return of nearly 60 percent.
Is it wrong for Wood Sister to do long-term ism in technology stocks?
She may be too paranoid, too tech-savvy, too tolerant of risk and volatility, and ignore investor sentiment and the experience of holding. However, Sister Wood is a very "straight" fund manager, and although her ideas are "crazy", she is crazy and frank, crazy and sincere.
Ark office high chair, wooden sister (middle position) can "bird's eye view" of everyone
We carefully review, in fact, Sister Wood's behavior does not conflict with the long-term doctrine expressed before.
Although there have always been voices questioning that Wood's favor for growth stocks is nothing more than an umbrella for "gambling", Wood has never responded to this because she does not need to deliberately explain or explain for her usual hobby of digging up good ideas that others have not discovered. As early as her first job as a stock researcher at Jennison Associate, she had dug up Reuters, Telerate and Vodafone in the scraps of her predecessors.
"Technology analysts don't look up to it because it's not a pure database; media analysts don't look at it because it's not a pure publisher," Wood recalls. But I said, I'll take them because that's the precursor to the internet. ”
For such a strange coffee, to see her unique long-termism, we must first recognize that she is a person who has achieved the ultimate in the consistency of words and deeds, and you can always believe that the wooden sister will not collapse.
For example, in Ark Investment, the performance of Wood Sister's fund is always too consistent to rise and fall. ARK's five actively managed ETFs are divided into 4 theme funds focusing on industrial innovation, internet, genetic innovation, and financial technology, and 1 comprehensive flagship product, ARKK. All fund heavy positions are closely focused on several promising industries, and the heavy positions of flagship products are all heavily positioned in several other theme funds.
Top 10 heavy positions for each product Source: Morningstar, MarketWatch Far Kawa finishing
Wood Sister also bluntly said in the December 2021 report that in terms of five-year term, the five industries she repositioned will generate 3-5 times the investment return; at the same time, she said in a CNBC interview, "We expect the compound return rate of the next five years to exceed 40%." ”
A magnificent five-year blueprint, recalling that the stock price soared by 743% in 2020, and made the wooden sister famous in 2020, it was in 2016 that the wooden sister was repositioned, and it was also five years later.
ARKInnovation (ARKK) Results Source: Yahoo Finance
The way The wooden sister plays, it's like putting eggs in four or five different baskets, and then putting all the baskets in one car, all thanks to the mobility of this car.
Just as the growth stocks that Wood Sister pays attention to have benefited from an important factor of deflation - deflation will drive down the cost of growth enterprises, and in 2021, the United States has fierce inflation, so the eggs in Wood Sister's different baskets have shattered in this car.
04
End
Back on the eve of COVID-19, ARK's net worth curve grew steadily like Buffett's. After March 18, 2020, everything became different, and the Fed hit the third wave of software devouring the world brought by deep learning. New energy vehicles, gene sequencing and financial technology present explosive innovation, wood sister began to take off, enthusiastic, fall, and now be criticized.
In this process, the Wood Sister Comprehensive Fund ARKK does not have one industry with 10 major positions, nor does it bet 70% on the 10 large positions, still purely adheres to those five industries, while maintaining sharing and exposure, just imagine if there is no water of the epidemic, whether Wood's net worth curve can be smoothed, and whether the fluctuation is small can reduce the prejudice and insults of some speculators when they lose money on the Wood Sister Fund.
Therefore, Sister Wood is not a "gambler" in people's mouths, and she has not fallen.
Wood further elaborated on her consistent investment personality in 2021, where companies that have historically performed very well will be undermined by the sheer volume of innovation that is taking place. Wood Sister is firmly in the minority because she believes that rip and replace are the rules of the world's processes.
Sister Wood is such a distinct person, her advantages and disadvantages are vividly displayed to investors, to show us.
When The Wooden Sister dashingly bids for a 5-year average return of 40%, can we also pay attention to the 2021 public champion managers in the new energy sector and give some less ambiguous insights on the performance of the fund?
End of the full article, thank you for your patience to read.