ARK Funds

[MRG]

Can you explain what you are saying here?

There was a post on Reddit r/wallstreetbets, supposedly from Cramer, probably a meme, asking that subreddit to pump other names besides Gamestop and Blackberry. The impression was that subreddit caused the short squeeze of both these names. I didn't verify the posters identify.

The smart money appears to have sold these names in this mornings frenzy.

 

[UnrealizedPotential]

You are right - the most common way for investors to get burned is to think they know where the market is headed. That's why it's a fools game to try to time you. You get burned when when not invested and it walks away from you.

Because now you have to decide whether to buy in for more or not. If you wait for the next correction, the risk is that the bottom of the correction might be higher than the current price. The old adage has some serious wisdom:

Time in the market beats trying to time the market.

Great, thanks for sharing! Let me ask you this to make sure I understand correctly. If Tesla can streamline for lack of a better word, the manufacturing plants it builds or has already built, that really is a game changer. It would open up the business to warp drive and it would be hard to overestimate the potential this could bring or maybe even to begin to understand its potential, other than it would be massive. Do I have it about right or is there more to the story?

 

[RetiredAtThirty-eight]

Great, thanks for sharing! Let me ask you this to make sure I understand correctly. If Tesla can streamline for lack of a better word, the manufacturing plants it builds or has already built, that really is a game changer. It would open up the business to warp drive and it would be hard to overestimate the potential this could bring or maybe even to begin to understand its potential, other than it would be massive. Do I have it about right or is there more to the story?

Yes, that's one important leg of the Tesla growth story. It's tough to compete with a company that is focused like a laser on putting more superior products out the door in less time. This is why the competition is running scared.

 

[Rich]

This thread got me curious as to my ARK funds. "Play money" of $25K put in on Nov 10th, results seen below:

 

[GreenEggs]

This thread got me curious as to my ARK funds. "Play money" of $25K put in on Nov 10th, results seen below:

At that rate, your "play money" could become "real money"!

If you have a few more bucks to play with, I've been having great results with Invesco's solar stocks TAN & PBW too. PBW was down today, so I picked up a few more shares.

 

[P.S.]

Argh! Was doing my annual clean up of open tabs on my ipad (yes, I know I should do this more frequently) and see that I had the ARK homepage open from last Jan, intending to investigate this more, but completely forgot about it. In Jan 2020, I spent almost every awake minute reading/thinking about coronavirus, so it’s good to be alive and better late than never...

 

[Qs Laptop]

Question for other ARK investors. Other than ARKK, which one of the other ARK funds would you recommend for buy-and-hold long term? Why?

I'm not interested in ARKK because I already own TSLA, ROKU, and TDOC and they are all in the top 5 holdings of ARKK (TSLA is #1, ROKU is #2)

 

[UnrealizedPotential]

I think chasing returns is rarely a good strategy.

I know very little about ARK investments and I prefer to stick with what I know something about. For those who think this is a good long term play , well I guess there's that and I wish them luck, but when the market turns these stocks will get hit hard and at this point in my life it's not worth it to me personally to take the risk I can't afford. I never really mentally got over getting hammered in the tech meltdown in 2000. I recovered financially in a few years, but mentally it left a scar.

I remember reading in a financial magazine around that time of some kind of a retired engineer who had 3 million in tech stocks and after the market crashed he was left with 300K and he had to go back to work.

 

[RetiredAtThirty-eight]

Question for other ARK investors. Other than ARKK, which one of the other ARK funds would you recommend for buy-and-hold long term? Why?

I'm not interested in ARKK because I already own TSLA, ROKU, and TDOC and they are all in the top 5 holdings of ARKK (TSLA is #1, ROKU is #2)

I like ARKG because genomics is going to be a huge thing over the next decade. The technology is ripe for explosion and the benefits and cures will astound people.

As far as getting "hammered" in the next downturn, I guess that depends upon one's definition of "hammered". ARKG might decline 10% more than the S&P 500 but it will also come back more quickly and harder. Market downturns are just a fact of the market, they don't bother me at all.

I will also add that ARK funds do not add stocks into their funds simply because they are popular or based on momentum. So they are holding companies they believe have the best risk/reward ratio over a 5 year time horizon. When market downturns happen ARK's strategy is to end up with more shares than they started with. This is because they are always "churning" their holdings. When a stock appreciates too much they have to re-balance. Over the last 3 years they have shown a good ability to create higher returns based on the volatility of the stocks in their fund and buying low, selling high.

The only time a market downturn is a bad thing is if the investor needs to sell before the market can rebound. That is why you should never have any money in the market that you will need in the next couple of years. People that get upset from simple market downturns do so because they have an emotional attachment to money. That's not very compatible with productive (or healthy)investing. If I had that issue, I wouldn't even invest in Index funds!

 

[RetiredAtThirty-eight]

I remember reading in a financial magazine around that time of some kind of a retired engineer who had 3 million in tech stocks and after the market crashed he was left with 300K and he had to go back to work.

If that engineer was holding tech stocks that didn't come back after the dot.com bubble burst, then he was not holding companies with good future growth and value. Since I don't try to time the market, it's very important to me to only hold companies I believe have long-term growth and value.

So by buying/holding good companies, and not panicking through market downturns, I've been able to constantly grow my portfolio over the years (even though I'm also taking six digit annual withdrawals to fund our lifestyle and living expenses). When I do sell shares in my brokerage account it's almost always when the market is strong in preparation for a weak market and also to maintain my cash allotment so I always have plenty of cash on hand (either to re-invest in promising companies or to withdraw to live on).

If I was afraid of market downturns, or had emotional reactions just because my brokerage account balance had declined 10 or 20%, I could not have done this for the last 20 plus years. I actually hope for market declines because that is the best time to add new positions.

 

[UnrealizedPotential]

If that engineer was holding tech stocks that didn't come back after the dot.com bubble burst, then he was not holding companies with good future growth and value. Since I don't try to time the market, it's very important to me to only hold companies I believe have long-term growth and value.

So by buying/holding good companies, and not panicking through market downturns, I've been able to constantly grow my portfolio over the years (even though I'm also taking six digit annual withdrawals to fund our lifestyle and living expenses). When I do sell shares in my brokerage account it's almost always when the market is strong in preparation for a weak market and also to maintain my cash allotment so I always have plenty of cash on hand (either to re-invest in promising companies or to withdraw to live on).

If I was afraid of market downturns, or had emotional reactions just because my brokerage account balance had declined 10 or 20%, I could not have done this for the last 20 plus years. I actually hope for market declines because that is the best time to add new positions.

If you've been that successful then good for you. Declines of 10 or 20% are no problem, it's when there is much more than that when it can become a problem. I am still thinking about Tesla, it's a interesting one of a kind company for sure, but unfortunately I don't have the stock expertise to know about tech, but I do know what can happen if one gets it wrong and it can ruin even a solid portfolio.

I know what I don't know, and many people didn't know what they didn't know in 2000 and got burned real bad. If you know what you are doing then I tip my cap off to you because I think there are a lot of investors that think they are smarter than they really are { I am talking generally, not those on the forum} and I have no problem admitting I don't understand tech all that well or how to value a company for future growth.

Thanks once again for throwing us a bone on Tesla, it at least opened up my eyes so I can understand it better.

 

[MRG]

Question for other ARK investors. Other than ARKK, which one of the other ARK funds would you recommend for buy-and-hold long term? Why?

I'm not interested in ARKK because I already own TSLA, ROKU, and TDOC and they are all in the top 5 holdings of ARKK (TSLA is #1, ROKU is #2)

ARKK, ARKG.

I hold some TSLA, not the other names so both make sense. I'm waiting for the rumored ARKX for space exploration.

 

[GreenEggs]

I think a big part of ARK's success is that they publically post their daily trades. That promotes stocks that may have likely never been noticed by retail investors. ARK buys and then a pack of followers buy too, raising prices. ARK sells and they follow, creating volatility and opportunity.

I don't think other funds have done this before.

 

[copyright1997reloaded]

I think a big part of ARK's success is that they publically post their daily trades. That promotes stocks that may have likely never been noticed by retail investors. ARK buys and then a pack of followers buy too, raising prices. ARK sells and they follow, creating volatility and opportunity.

I don't think other funds have done this before.

I can't remember the name, but there was a fund in 1998+ that was posting their fund activity on a real time basis. I used to follow it (mostly curiosity).

When the dot com bust happened they lost a lot of $.

 

[MRG]

I can't remember the name, but there was a fund in 1998+ that was posting their fund activity on a real time basis. I used to follow it (mostly curiosity).

When the dot com bust happened they lost a lot of $.

Janus?

 

[RVplusDog]

ARKK, ARKG.

I hold some TSLA, not the other names so both make sense. I'm waiting for the rumored ARKX for space exploration.

It’s more than a rumor - SEC filing indicates 75 days:
https://www.sec.gov/Archives/edgar/data/1579982/000110465921003837/tm212832d1_485apos.htm

 

[RetiredAtThirty-eight]

I think a big part of ARK's success is that they publically post their daily trades. That promotes stocks that may have likely never been noticed by retail investors. ARK buys and then a pack of followers buy too, raising prices. ARK sells and they follow, creating volatility and opportunity.

I don't think other funds have done this before.

ARK Invest posts their daily trades because they are required to by the SEC. This is true of all stock trading ETF's that are available to retail investors. I'm certainly no expert on SEC requirements but I have listened to Cathie Wood tell the story of how she started her funds and the daily posting of trading activity was a requirement, not a choice.

The thing that differentiates this from a mutual fund is that the shares are created and then sold on the public markets. The market determines the price of the shares, not the fund owner, ARK. If they didn't disclose their trading activity daily, the market participants would have no idea how much the fund was worth.

 

[GreenEggs]

ARK Invest posts their daily trades because they are required to by the SEC. This is true of all stock trading ETF's that are available to retail investors. I'm certainly no expert on SEC requirements but I have listened to Cathie Wood tell the story of how she started her funds and the daily posting of trading activity was a requirement, not a choice.

The thing that differentiates this from a mutual fund is that the shares are created and then sold on the public markets. The market determines the price of the shares, not the fund owner, ARK. If they didn't disclose their trading activity daily, the market participants would have no idea how much the fund was worth.

Are you sure that they're required to post their trades on a daily basis? I haven't seen other funds offering those details.

Perhaps the portfolios of the other ETFs I have aren't so actively traded. I searched for the trading info for Invesco's TAN & PBW but only found a portfolio heading that lists their holdings as of yesterday's date.

Do you know where I can see the daily trades for them?

 

[RetiredAtThirty-eight]

Are you sure that they're required to post their trades on a daily basis? I haven't seen other funds offering those details.

Perhaps the portfolios of the other ETFs I have aren't so actively traded. I searched for the trading info for Invesco's TAN & PBW but only found a portfolio heading that lists their holdings as of yesterday's date.

Do you know where I can see the daily trades for them?

I'm sure ARK funds are required to post their trades daily - I'm not clear on exactly what triggers this requirement because I've always been more of an individual stock investor. These ARK funds are the first time in my life I've bought anything that contained a basket of stocks.

 

[copyright1997reloaded]

Janus?

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

 

[RetiredAtThirty-eight]

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

Yes, but it sucks less than the alternative!

 

[garyt]

I bought into 3 ARK funds awhile ago when I read an impressive article about Cathie Wood. I confess to not knowing much about the companies they invest in, that's why I use them, but believe in disruptor companies in the future. I don't have a huge stake but the returns have been nice to say the least.

 

[Lsbcal]

I notice that most of the ARK etf's had their largest holding in Tesla. Those were in the 9% and above region which is really big and makes these etf's very concentrated. As a comparison the Vanguard Growth Fund (VUG) has 3% in Tesla and was up only 35% over the last year.

ARKF (Fintech) has no Tesla but does have 9% in Square.

 

[RetiredAtThirty-eight]

I notice that most of the ARK etf's had their largest holding in Tesla. Those were in the 9% and above region which is really big and makes these etf's very concentrated. As a comparison the Vanguard Growth Fund (VUG) has 3% in Tesla and was up only 35% over the last year.

ARKF (Fintech) has no Tesla but does have 9% in Square.

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.

 

[nwsteve]

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.