ARK Funds

[copyright1997reloaded]

ARK allocates capital proportionally to their conviction that each stock will be a good investment. So, if ARK has a higher percentage of TSLA than any other stock (and they do), it's only because they were more confident that TSLA would be a good investment. Their second largest holding is their second highest conviction, etc., right down the lline until you get to stocks they only hold 1% of. They regularly re-appraise every holding and it can move up or down in conviction.

What makes ARK so impressive is almost all their top holding have had exceptional performance. TSLA was their top holding for at least the last 5 years. Only in the last two years did the rest of the market recognize that TSLA was a good investment. ARK is more concerned with the success and growth rate of a company than "playing the market" although they indirectly are forced to "play the market" to keep their top holdings from over-taking their portfolio. They need to remain diversified as their prospectus lays out.

They have a proven track record with many stocks, not just TSLA.

All hail ARK.

https://getyarn.io/yarn-clip/5b842396-d7be-451f-9901-8dd02f997fec

 

[OldShooter]

ARK allocates capital proportionally to their conviction that each stock will be a good investment. ...

I wonder why no one ever thought of that before.

 

[RetiredAtThirty-eight]

I wonder why no one ever thought of that before.

Well, some have a track record of success and some have a track record of mediocrity. This concept only works if you are good at picking the winners, something many have trouble doing.

I didn't claim the idea was unique, I was just explaining why TSLA was the largest position in all of their funds that cover TSLA.

I don't know about you but I think the fact that their largest holding in so many of their funds just happened to appreciate 14 fold after they were done maxing out their allocation speaks volumes about their ability to make accurate and timely analysis rather than just following the rest of the Wall Street "herd" like so many funds do.

But the peanut gallery will always throw their peanut shells at people who demonstrate more ability than they.

 

[RetiredAtThirty-eight]

All hail ARK.

https://getyarn.io/yarn-clip/5b842396-d7be-451f-9901-8dd02f997fec

I do think competence should be recognized. Some people prefer to attribute good results to luck when anyone shows an ability better than themselves. I know, it's crazy, but some people believe they are talented and skilled and know what they are doing while anyone who performs better is just another example of a lucky streak.

I make my living by investing so I can't be so dismissive - I need good results to justify the time I spend analyzing opportunities.

 

[OldShooter]

... But the peanut gallery will always throw their peanut shells at people who demonstrate more ability than they.

I just ping you once in a while because your humility is such a hoot.

 

[RetiredAtThirty-eight]

RetiredAt38--As an ARK follower and advocate, I would be interested in your take on the recent WSJ article on Cathi Woods--https://www.wsj.com/articles/cathie-wood-is-wall-streets-hottest-hand-maybe-too-hot-11612544044?page=1
Article is probably behind a firewall. Couple points from article suggest that her success has attracted a lot of copycats and front runners which may it more difficult to replicate her accomplishments in the future.
FWIW, I took a small position a couple weeks when I first saw this thread and was impressed by what I learned. I particularly find her using non MBA types for analysts and favoring topic scientists for her selections.

I was one of the front-runners that benefitted from ARK becoming the fund family to own. Both by buying ARK funds early and riding them up and also buy taking a nice position in CRSP, one of the top holdings in ARKG, which benefitted from ARKG having to buy more CRSP every time their fund grew in size.

So the effect is real but how material it is on the downside has yet to be seen. I think it will definitely have an effect but the question is, how large? In other words, are the disruptive technologies more disruptive than the investors who choose to front-run? I'm certainly not selling any of my long-term holdings because of that effect.

If that article doesn't mention the upside of all this front-running, then I have no choice but to consider the article as short-sighted (at best) and a "hit piece" (at the worst). Because all this buying, either of the funds themselves or the individual stocks within the funds, is very good for the development stage companies contained in the funds. It helps them raise capital more cheaply and gives them a leg up over any possible competitors.

So, no, I consider the net positives outweigh any potential negative impact.

 

[sonnieseas]

I don't think so....really wish I could remember the name of the fund and who ran it. Sucks getting old.

Van Wagoner?

 

[Lsbcal]

ARK allocates capital proportionally to their conviction that each stock will be a good investment. So, if ARK has a higher percentage of TSLA than any other stock (and they do), it's only because they were more confident that TSLA would be a good investment. Their second largest holding is their second highest conviction, etc., right down the lline until you get to stocks they only hold 1% of. They regularly re-appraise every holding and it can move up or down in conviction.

What makes ARK so impressive is almost all their top holding have had exceptional performance. TSLA was their top holding for at least the last 5 years. Only in the last two years did the rest of the market recognize that TSLA was a good investment. ARK is more concerned with the success and growth rate of a company than "playing the market" although they indirectly are forced to "play the market" to keep their top holdings from over-taking their portfolio. They need to remain diversified as their prospectus lays out.

They have a proven track record with many stocks, not just TSLA.

The ARK performance certainly is impressive. Do you plan to hold this indefinitely or do you have a reduce strategy?

We are definitely in a growth company surge and I have no idea when it stops. I have a large portfolio holding in large growth so not a stranger to this sector. But I have a methodology which could even go to small/mid value, evaluated on a month basis.

 

[GreenEggs]

I just noticed ARK's 3-D printing fund, PRNT, which seems to have been largely overlooked by most of us has been on fire. + 39.29 YTD

 

[RetiredAtThirty-eight]

The ARK performance certainly is impressive. Do you plan to hold this indefinitely or do you have a reduce strategy?

We are definitely in a growth company surge and I have no idea when it stops. I have a large portfolio holding in large growth so not a stranger to this sector. But I have a methodology which could even go to small/mid value, evaluated on a month basis.

My strategy is to hold through the correction/downturn that I think has a better than 66% chance of happening and to buy more if and when it does happen. The key point here is that no one knows when it will happen or even if it will happen. Ark funds comprise slightly less than 2% of my brokerage account and I would like them to be around 10%, if not more, so I would welcome a correction.

As to the length of holding, I am a long-term, buy and hold investor so as long as I feel ARK is continuing to do a good job appraising the growth sectors they cover, I plan to hold. They sort through the companies history before they buy them and filter out the ones that are all show and no go or don't have reasonable paths to commercialization. There will be downturns/corrections but I expect the sectors they cover will outperform over the next couple of decades.

Investors who try to shield their capital from market downturns under-perform investors who embrace growth companies and have the patience to let their business plans succeed. Not all will succeed, in fact, most will not, which is why it's important to have good discretion as to where the capital is allocated. Done with reasonable due diligence, the ones that succeed should more than make up for the ones that don't.

 

[Spanky]

I wonder why no one ever thought of that before.

Haha! That is hilarious.

 

[copyright1997reloaded]

Van Wagoner?

Don't think so, but in searching that name I found this article that seems pretty pertinent to this threads discussion:
https://www.marketwatch.com/story/former-internet-fund-stars-10-years-after-the-bust-2010-03-08

They were masters of a parallel universe, the soul-mates of a new technology. Then the real world intruded on mutual fund managers who'd been Poseidons astride the Internet-stock wave.

The rallying cry of the Internet crowd, "It's different this time," was at once bullish and bullying. Anyone who said otherwise about stock valuation -- that sales and earnings still mattered -- just didn't get it.

We are in the midst of a similar mania.

Don't get me wrong - I'm playing it myself. I've done more trades in the last three months than in the previous three years. Pot stocks, EV stocks, small cap biotech, 3D metal printing, and so on. I am keeping it to play money, and some of the companies I might even like long term. But even with those I've sold off (and bought back) multiple times because of the swings and quick rise action - days where the stock runs 10 or 15 or 20% in one day. I've had to shift some of the action from my regular (taxable) account to an IRA because I am getting concerned with the short term capital gains I am racking up.

(In reading the above, I get worried that my statement is indicative of "peak enthusiasm. )

My rationale (whether good or bad) is that the mania can last a lot longer than it should. If you sold off everything mid-1998 or even early 1999, a lot of gains were missed out. So I've been playing a bunch of things (some of which funds like "All hail ARK" pick up on and help to take it even higher). In the meantime I'm trying to keep the leash on these short, and to take partial profits on run ups.

 

[copyright1997reloaded]

I just noticed ARK's 3-D printing fund, PRNT, which seems to have been largely overlooked by most of us has been on fire. + 39.29 YTD

Yep.

I bought Desktop Metal (DM) back when it was a SPAC under the symbol of TRNE on 11/23 @ $11.32, bought more on 11/30 @ $12.16, bought about another 1/3 on 12/10 @ 18.77. Trimmed (sold) about 15% on 1/14 @ $23.27, another piece on Friday (2/5) @ $31.00. I have a little over half of my peak position left.

DM is the 4th largest holding in PRNT. All Hail Ark, and I thank them for helping to run up DM.

This is one I like the future of (they have some interesting 3D metal printing technology), but had to take some off the table given how rapidly it has moved up.

 

[OldShooter]

... (In reading the above, I get worried that my statement is indicative of "peak enthusiasm. ) ... My rationale (whether good or bad) is that the mania can last a lot longer than it should. If you sold off everything mid-1998 or even early 1999, a lot of gains were missed out. So I've been playing a bunch of things (some of which funds like "All hail ARK" pick up on and help to take it even higher). In the meantime I'm trying to keep the leash on these short, and to take partial profits on run ups.

It's possible top make money in these deals, no doubt about it. But be sure to be out before the greater fools stop showing up.

Sir John Templeton: “The four most expensive words in the English language are 'This time it’s different.' ”

 

[foxfirev5]

Janus?

Your post regarding the late 90's reminded me of both Janus and Putnam OTC. Peeled off plenty on the way up but still got hammered when it fell apart in '00.

 

[MRG]

Your post regarding the late 90's reminded me of both Janus and Putnam OTC. Peeled off plenty on the way up but still got hammered when it fell apart in '00.

+10000
I seem to remember people trying to frontrun Janus.

 

[copyright1997reloaded]

It's possible top make money in these deals, no doubt about it. But be sure to be out before the greater fools stop showing up.

Sir John Templeton: “The four most expensive words in the English language are 'This time it’s different.' ”

That's for sure.

The SPAC play has been incredible, but no doubt the party will at some point be over. I can see it playing out already in terms of deal structure. For instance, when the private companies see SPAC's running up big time after deal announcements, they then think "Hm, we should have more equity in our deal and less to the SPAC/PIPE investors" and say "Hm, we should make the warrant terms more favorable to us" and so on. So the newer deals will be less favorable to the SPAC, more to the owners going public via SPAC reverse merger.

My exposure is limited, which has meant and will mean I won't get crazy rich on these, nor (hopefully) will I lose everything. Although by reading the other post I made, it sounds like I am a day trader/speculative crazed person, I am by nature mostly a conservative investor. My total exposure as of Friday's close is about 2.5% of my net worth. That has gone up over my capital allocation to it because of the run up. I've taken out (realized gains) an amount that is 0.4 to 0.5% of my overall net, and of the remaining I am sitting at about a 30% overall gain (would be more but I've taken gains both last year and YTD).

 

[copyright1997reloaded]

+10000
I seem to remember people trying to frontrun Janus.

If ER.org was alive then, there would be people here telling us that Janus was all knowing and that we just don't understand that Janus has superior stock picking ability and that Janus understands (and we don't) fundamental changes like "the Internet and World Wide Web". All the while some of us were out there creating it.

All hail Janus.

 

[Lsbcal]

I track asset classes of interest. Things since Oct 2020 have favored small caps, then midcaps and lastly large caps. The real story seems to be small cap out performance while growth vs value is not really that different.

Since Oct 1 2020 for Vanguard index funds:
SV = 40%
SG = 37%
MV = 24%
MG = 24%
LV = 18%
LG = 17%
SP500 = 16%

 

[RetiredAtThirty-eight]

It's possible top make money in these deals, no doubt about it. But be sure to be out before the greater fools stop showing up.

Sir John Templeton: “The four most expensive words in the English language are 'This time it’s different.' ”

Taking all your writings in total, it looks like you believe in trying to time the market but not in increasing your returns by picking quality stocks and avoiding the dogs.

 

[Lsbcal]

Taking all your writings in total, it looks like you believe in trying to time the market but not in increasing your returns by picking quality stocks and avoiding the dogs.

Oh boy, now you have opened the Pandora's box.

I hope this thread stays off all that old controversial stuff. So repetitive.

 

[RetiredAtThirty-eight]

Oh boy, now you have opened the Pandora's box.

I hope this thread stays off all that old controversial stuff. So repetitive.

Well, we've got a real problem if consenting adults can't discuss investing strategies like gentlemen. A little controversy is not a bad thing.

 

[NW-Bound]

If ER.org was alive then, there would be people here telling us that Janus was all knowing and that we just don't understand that Janus has superior stock picking ability and that Janus understands (and we don't) fundamental changes like "the Internet and World Wide Web". All the while some of us were out there creating it.

All hail Janus.

Ah, Janus.

I happened to buy 2 Janus funds in the early 1990s: Janus Fund and Janus Twenty Fund. I put a few $K in each of them, and did not even pay attention to the statements they sent, because I was busy with work. I also neglected all my other investments, even my 401k which was the largest account.

In about 1999-2000, due to the stock mania, I paid attention to my investments, and was glad to see Janus funds plus another American Century fund shooting up like rockets. Yes, they all piled onto Internet infrastructure stocks, much like EV stocks today.

And I still recall a Janus advertisement claiming they knew the most about Internet infrastructure companies, because they even hired guys to climb down manholes to see how many fiber cables these companies installed. Right. The Internet traffic was doubling every few months or something like that, so the world needed lots and lots of fiber cables soon.

Later, I read that all those installed fibers were dark, meaning unlit. It would take a lot more money for the equipment at the two ends of that fiber, plus the problem was with the "last mile". The phone companies were still working with the DSL, and the cable companies with their cable modem. Quite a few of these fiber companies went under.

And so, when the dot-coms imploded, so went the Internet infrastructure companies, and the beloved Janus funds. I had a lot more money outside these funds that I managed myself, so left them alone to see what transpired. They lost 1/2 their value from the top or something like that.

 

[MRG]

Ah, Janus.

I happened to buy 2 Janus funds in the early 1990s: Janus Fund and Janus Twenty Fund. I put a few $K in each of them, and did not even pay attention to the statements they sent, because I was busy with work. I also neglected all my other investments, even my 401k which was the largest account.

In about 1999-2000, due to the stock mania, I paid attention to my investments, and was glad to see Janus funds plus another American Century fund shooting up like rockets. Yes, they all piled onto Internet infrastructure stocks, much like EV stocks today.

And I still recall a Janus advertisement claiming they knew the most about Internet infrastructure companies, because they even hired guys to climb down manholes to see how many fiber cables these companies installed. Right. The Internet traffic was doubling every few months or something like that, so the world needed lots and lots of fiber cables soon.

Later, I read that all those installed fibers were dark, meaning unlit. It would take a lot more money for the equipment at the two ends of that fiber, plus the problem was with the "last mile". The phone companies were still working with the DSL, and the cable companies with their cable modem. Quite a few of these fiber companies went under.

And so, when the dot-coms imploded, so went the Internet infrastructure companies, and the beloved Janus funds. I had a lot more money outside these funds that I managed myself, so left them alone to see what transpired. They lost 1/2 their value from the top or something like that.

I remember that same commercial[emoji3]. Oddly I met Janus's first CIO in the early 90s. I was there with my mentor for a day to assist them with something. To say I was unimpressed with the CIO was a huge understatement then he made the following statement: "I was cleaning up by the printer like every other night when Tom Bailey came by asked me questions about the printer. At the end of the discussion I was prompted by Mr. Bailey from janitor to CIO". He was a nice man, I never saw him again. To be clear this guy wasn't involved with the funds.

 

[MarieIG]

I seem to be late to the party, but then again I almost always am.

Looked up this ARK, it looks very interesting. I am thinking about buying just a teeny, tiny, bit, and then forgetting about it (unless it gets really cheap).