ARK Funds

[copyright1997reloaded]

ALL HAIL ARKK (revisited)

The latest Teladoc (TDOC) blow up had me thinking of Kathie Woods, and sure enough I heard her on CNBC today.

Revisiting, my last post had ARKK @ $60.95, down from the $149.46 ARK sarcasm post.

Now at $47.13, so down another 22.7% and down almost 68.5% from the sarcasm post.

https://www.youtube.com/watch?v=A9sd10CHAP8[/URL

Of course, while I gloat in my "All hail ARK", it has been a brutal day/week/month/year in the market, and I have felt my share of the beating.

But not as much as the "You don't understand, these stocks are TRANSFORMING THE WORLD!" folks.

 

[foxfirev5]

VTI and chill as many Bogleheads say. Long term cover your needs and go for it. For me it's 50% VTI and a dose of VYM, SCHD, HDV and SPYD. My wild side has not been tempted at all by Cathie Woods.

 

[gumshoe]

It's always interesting to see posters who enjoy success with a particular investment approach are more than happy to share their wins when times are good but disappear when things go south.

This is not to say that I revel in their failures (I myself have a very spotty record when it comes to stock picking so I am particularly unqualified to play the schadenfreude game). But I think it would be interesting if these posters are willing to share their strategy on how to handle/mitigate the downside of their investment approach when the market goes south; their experience might prove useful/educational to other forum members.

I did a post on my investment style several years back and definitely pointed out my losses during the tech bust of 2000 and the mortgage loan debacle of 2008/2009. I have been a long term "buy & holder" of both individual stocks, ETFs and mutual funds, for about 40 years now. Have always stayed about 85 to 90% equities and the rest in cash. Never was a fan of bonds as I have some rental income.

Portfolio is very diversified with large cap, mid cap, small cap, international/emerging markets, and (most importantly) different sectors/industries. I was able to quit work at age 50 because my investment style worked out very well. Am now 68. It takes a lot of patience, and you have to start early. It seems most people don't have either the temperament or the guts to stay the course. Instead, they sell out at the first sign of danger but don't know when to get back in the market, thereby losing a lot of the upside (which can take place over just a few days or weeks sometimes.) For younger investors, I think this method will work out well because time is on their side. But this method may be a bit too daring for someone nearing retirement, although I have pretty much held to this style up to the present time. However, I have been leaning more towards large cap dividend payers recently. If you are successful with this method, your biggest worry will be exceeding the exemption for Federal (and possibly State) estate taxes.

 

[copyright1997reloaded]

And....with todays loss, ARKK is below where it was at the beginning of 2020.

 

[Markola]

And....with todays loss, ARKK is below where it was at the beginning of 2020.

For that matter, Fidelity Contra Fund is, too. Most actively managed funds underperform index funds.

 

[copyright1997reloaded]

For that matter, Fidelity Contra Fund is, too. Most actively managed funds underperform index funds.

While I understand your point, this isn't just a question of active vs. passive. It is an example of the mantra of "You don't understand, these are disruptive technologies and will change everything".

Here's a chart of ARRK compared to the Nasdaq circa 2000:
https://stockcharts.com/h-sc/ui?s=ARKK&p=W&yr=6&mn=6&dy=0&id=p27775638992&a=1081073226

Certainly, one could have argued that a passively managed fund that used Nasdaq as its proxy would not have done well in any sense of the word during that timeframe.

Or a more recent example, one that I painfully own: XBI. This ETF is simply an equal weighted one for Biotech. It is now below its level at the end of April of 2015....so a net loss for "transformative biotechnology" over seven years.

 

[Montecfo]

She bought GM.
Trimmed TSLA

Wow...

 

[NW-Bound]

Or a more recent example, one that I painfully own: XBI. This ETF is simply an equal weighted one for Biotech. It is now below its level at the end of April of 2015....so a net loss for "transformative biotechnology" over seven years.

+1 on XBI. I am just glad I don't have too many shares of it.

 

[joesxm3]

Where did you see Ark buying GM? According to cathiesark.com she has been selling Feels but I did not see buying GM.

Cathie explained her selling tesla in order to shift to companies that she has equal conviction in but have dropped much harder than tesla. She attributes tesla's relative strength to it being in so.e indexes.

 

[aja8888]

Where did you see Ark buying GM? According to cathiesark.com she has been selling Feels but I did not see buying GM.

Cathie explained her selling tesla in order to shift to companies that she has equal conviction in but have dropped much harder than tesla. She attributes tesla's relative strength to it being in so.e indexes.

The selling of whatever she is selling to fund seller redemption's.

 

[joesxm3]

Ark has had $1.3B of net inflows in 2022.

https://markets.businessinsider.com...lows-despite-price-decline-cathie-wood-2022-5

 

[Montecfo]

Where did you see Ark buying GM? According to cathiesark.com she has been selling Feels but I did not see buying GM.

Cathie explained her selling tesla in order to shift to companies that she has equal conviction in but have dropped much harder than tesla. She attributes tesla's relative strength to it being in so.e indexes.

Google it. Widely reported.

 

[joesxm3]

Interesting. Must not have been updated on the cathiesark web site.

Small position in ARKQ, but interesting nonetheless.

 

[copyright1997reloaded]

After hours action:
COIN - 7th largest ARK Invest (combined) holding - imploding on earnings, down 12.6% today and down another 10.8% after hours (as I type this).
U - Unity (Game development) SW - 10th largest ARK invest holding - imploding on earnings, down 4. 5% today and 36.7% after hours (again as I type this).


I've done development using Unity, I was tempted to buy it shortly after it IPO'd, but missed it and didn't want to chase it up up up.

 

[joesxm3]

Funny that there were a lot of articles saying that Cathie bought GM for ARKQ, but it is not listed in the 5/10 ho!dings PDF.

 

[NW-Bound]

Ark has had $1.3B of net inflows in 2022.

https://markets.businessinsider.com...lows-despite-price-decline-cathie-wood-2022-5

Wow. A lot of money comes in, and CW keeps buying, yet her stocks keep going down. There's got to be more willing sellers than buyers like CW.

 

[yakers]

Rats, hold some COIN, down 50%+ for me, and worse, in an IRA

 

[Markola]

While I understand your point, this isn't just a question of active vs. passive. It is an example of the mantra of "You don't understand, these are disruptive technologies and will change everything".



Here's a chart of ARRK compared to the Nasdaq circa 2000:

https://stockcharts.com/h-sc/ui?s=ARKK&p=W&yr=6&mn=6&dy=0&id=p27775638992&a=1081073226



Certainly, one could have argued that a passively managed fund that used Nasdaq as its proxy would not have done well in any sense of the word during that timeframe.



Or a more recent example, one that I painfully own: XBI. This ETF is simply an equal weighted one for Biotech. It is now below its level at the end of April of 2015....so a net loss for "transformative biotechnology" over seven years.

Sorry, I’m having a hard time understanding your point. The chart provided seems to overlay the peak of NASDAQ with the peak of ARKK, which happened a year apart. I don’t know what to make of that. Second, haven’t many of the best and largest tech behemoths migrated to the NYSE, damaging NASDAQ returns? Please try again to help a confirmed index investor-who-owns-some-Bitcoin, like me, understand where you’re placing ARKK in that context. Personally, I’d never buy it anymore than I’d buy an active fund or pick stocks but I get excited hearing Cathie Woods describe the transformational technologies on society’s horizon, regardless of which companies eventually manage to survive and make the cut into NYSE beasts. One can do both.

 

[OldShooter]

Sorry, I’m having a hard time understanding your point. The chart provided seems to overlay the peak of NASDAQ with the peak of ARKK, which happened a year apart. I don’t know what to make of that. Second, haven’t many of the best and largest tech behemoths migrated to the NYSE, damaging NASDAQ returns? Please try again to help a confirmed index investor-who-owns-some-Bitcoin, like me, understand where you’re placing ARKK in that context. Personally, I’d never buy it anymore than I’d buy an active fund or pick stocks but I get excited hearing Cathie Woods describe the transformational technologies on society’s horizon, regardless of which companies eventually manage to survive and make the cut into NYSE beasts. One can do both.

I take @copyright1997reloaded's chart as an illustration of a perennial market phenomenon. An asset takes off like a rocket ship, climbs impossibly, runs our of fuel, and crashes to earth. This is an old, old story, repeated frequently. Remember JDS Uniphase?. ​“Those who cannot remember the past are condemned to repeat it.” – George Santayana,

Cathie is an old (66YO), experienced hand and a superb huckster. She knows how these things work. So what is going on?

I think she decided that creating a rocket ship was the best way to maximize the AUM fees she collects, notwithstanding the rocket ship's inevitable demise. She created a few potential rocket ships and got lucky with ARKK. Money poured in, NAV rose significantly and she raked in the AUM dough. As the ship began returning to earth, she has been using her huckster talents to convince true believers that the descent is temporary, thus maximizing AUM fees as the rocket ship dies. She can now retire a rich woman.

 

[Markola]

Ok but why would anyone have their AUM with a firm investing in obviously risky, bleeding-edge tech? Hopefully, not Grandma in for 100% tech but institutionals who knowingly put a small % of their portfolio in high risk, volatile investments. Caveat emptor.

 

[OldShooter]

Ok but why would anyone have their AUM with a firm investing in obviously risky, bleeding-edge tech? Hopefully, not Grandma in for 100% tech but institutionals who knowingly put a small % of their portfolio in high risk, volatile investments. Caveat emptor.

I was referring to Cathy's 75bps mutual fund fee, which is based on a percentage of assets under management. Not implying that Grandma or anyone else had put her whole stash with Cathy.