Cathie Wood continues buying tech stocks, adding another $9 million to her portfolio.
Cathie Wood’s Ark Investment Management strategy targets tech stocks with high disruptive potential and sizable growth.
Her goal is to pick the next generation of disruptors with 10X or more potential growth in stock value. But it is a high-risk high-reward investment strategy that could produce an alpha return when central banks are loose where everything rises.
“Her goal is to pick the next generation of disruptors with 10X or more potential growth in stock value”
WEALTH TRAINING COMPANY
Cathie Wood continues buying tech stock disruptors, a strategy with its fair share of ebbs and flows
In 2020, Cathie Wood’s ARK fund rose 149% when central banks intoxicated the market with liquidity during the pandemic lockdowns.
But in a sobering liquidity environment, Cathie Wood’s fund underperformed.
“ARK ETF Trust, which runs the popular ARK Innovation ETF (ARKK), has wiped out $14.3 billion in investors’ wealth over the past 10 years, says a new analysis from Morningstar. That ranks it as the No. 1 wealth destroying fund family in that time,” wrote Morningstar in 2024.
Wood’s fund has been nicknamed wealth destroyer, which inspired the birth of the SARK fund as a hedge, a bet against Cathie Wood’s risky Ark.
“ARK ETF Trust, which runs the popular ARK Innovation ETF (ARKK), has wiped out $14.3 billion in investors’ wealth over the past 10 years”
MORNINGSTAR
In the recent bull market, ARKK ETF mostly traded sideways or declining through 2024.
So perhaps it is no surprise that in 2024, ARK Innovation ETF has seen a net outflow of nearly $3 billion, with $24 million exiting the fund in the past month, according to ETF research firm VettaFi.
If this risk-off sentiment continues, could SARK be your best bet?
“On Feb. 6, Wood’s ARK Innovation ETF bought 121,696 shares of Qualcomm Inc (QCOM)” – Wealth Training Company
Cathie Wood continues buying tech stocks, and could her fortunes change?
Her ARK ETFs typically buy shares in emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.
Cathie Wood says these companies have the potential to reshape industries, but their volatility leads to significant fluctuations in ARK funds’ values.
But with a Trump administration favouring deregulation and setting up a $500 Billion AI tech fund, maybe Cathie Wood’s Ark fortunes could change. Since Trump’s 2024 re-election, the ARK Innovation ETF and the ARK Next Generation Internet ETF (ARKW) have seen significant gains.
Since Nov. 5, the two ETFs have returned 30% and 35%, respectively.
So, the ARK fund could outperform in a Trump 2.0, which is pro-deregulation, with more funding for tech and crypto-friendly.
Cathie Wood shared the optimism.
“What the new administration is doing is changing fear with optimism,” Wood told Bloomberg on Jan. 22. It’s “highly underestimated how important deregulation is going to be to unleashing animal spirits. We are pretty excited about this,” said Cathie Wood
Cathie Wood continues buying tech stocks, but which one?
On Feb. 6, Wood’s ARK Innovation ETF bought 121,696 shares of Qualcomm Inc (QCOM).
Her purchase was valued at $9.13 million as of Feb.7.
Qualcomm’s cash cow has been its patents.
It owns key patents for mobile communication, like 5G, meaning Apple and Samsung pay Qualcomm a fee for every phone sold, even if they do not use its chips.
What then is the solution, according to Dalio?
“If I were running Fed policy, I would want to keep an eye on the economy of the bottom 60%,” said Dalio. Dalio wrote. “By monitoring what is happening in the economies of both the bottom 60% and the top 40% (or, even better, more granular groups), policymakers and the rest of us can give consideration to the implications of this issue.” His solution is “some mix of directing resources so that they are used productively to generate more than enough income or savings in order to pay for themselves and b) productive wealth transfers appears inevitable.”
What is Dalio’s view on universal income?
Basically, Dalio rejects the universal basic income proposal advocated by the likes of billionaire Facebook CEO Mark Zuckerberg.
