This article is from WeChat official account:Wall Street knowledge (ID: wallstreetcn)< span class = "text-remarks">, author: Lin Jingyang, the original title: “” for God with a capital “woman! 》
It is difficult to imagine such a pattern that will shake the market:
It invests in Tesla, betting that it will subvert the automotive sector; it invests in Bitcoin, betting that it overturns the currency system; it prepares a space fund, looking at the future of Mars; it invests in streaming media platform Roku, mobile payment company Square, 3D printing The company Stratasys, they are at the forefront of technological progress, and together they move the levers of contemporary life reform.
It said to give me a few fulcrums and let me move the whole world.
It will bet on disruptors in all walks of life, and stand at the center of the storm in the asset management industry. Born on Wall Street, it abandoned tradition and disregarded “discipline”, and finally embarked on a deviant investment path. Today, it has once been infinite glory and has been questioned. The overturning of the building or overnight, how many people have seen it rise up, how many people want to see it overturned.
And how it all started, ask the founder of ARK Invest, the now well-known annual “Bull Queen”. Ms. Cathie Wood, who is over 65 years old, sits in a comfortable chair, strokes her shoulder-length gray-brown hair, and stabilizes her iconic black-framed glasses. She slowly recalled that many years ago. Summer afternoon:
It was a beautiful summer day. When I returned home, there was a strange silence around me. The three children went to the Christian camp, and there were other activities. I suddenly realized that I would spend the next two weeks alone.
I have been separated from such days for too long. When I walked into the kitchen, I was neither happy nor sad, but a little trance…Until a sudden shaking cut through the air, I seemed to hear the Holy Spirit talking to me——
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In the early 1980s, the United States was in the abyss of high stagflation. At the same time as production fell and the unemployment rate soared, prices not only did not fall, but generally rose sharply. There is a rare occurrence of high inflation, high unemployment and low economic growth. situation. At that time, Paul Volcker, the newly appointed chairman of the Federal Reserve, tried to reduce the money supply to combat high inflation, but he still had little success.
U.S. inflation rose to a high point in 1980
In this context, “Doctor Doom” Henry Kaufman and Milton Friedman, among the most authoritative American economists at the time, desperately believed that inflation had become the norm and had deep roots. Up.
Wood thinks otherwise. She insists that interest rates and inflation have peaked.
Jennison’s co-founder Spiros Segalas and Wood were also mentors and friends. During that time, he often invited these celebrities in the academic world to share their predictions with the company, and for training, testing, or communication purposes, let Wood stood on the “opposite side” and argued with them one-on-one.
On the one hand, there are veterans with many years in the world and a huge camp, and on the other hand, a minority player who has just become the chief and seems to have little experience only by his age. We have no way of knowing whether the “Kaufmans” are seriously participating in this academic. In the battle, I still performed with the mentality of teaching the younger generation, but the facts finally proved that Wood’s judgment was very accurate. After the Reagan administration came to power in 1980, inflation and interest rates were well controlled, and they fell all the way from the peak.
After witnessing many debates, Segalas made this assessment of Wood: a lady with incredible firm conviction. She is by far the sharpest one.
Wood later said that it was those days that really shaped her ability to behave and challenge authority, and made her deeply aware of the need to be vigilant about the so-called “consensus”, which seem indisputable but often questionable. Space-and those behaviors that violate the “consensus” may have huge potential instead.
Decades later, looking back on the past of the newborn calf, Wood willI found that when I made this accurate prediction, I was standing at the intersection of myself and the turning point of history.
Once interest rates fall, there will be a 40-year bull market in technology stocks, and she will participate in it soon, fighting in the same “maverick” posture for several years, until it sets off. storm. At that time, she will no longer “disobey” several academic “Kaufman”, but an entire Wall Street.
She didn’t expect this at the time.
03 Switching to stocks: looking for leftovers under the table
All she can smell is that the wind of technology stocks will be blowing for a while. The technology companies that had been hit hard by interest rate behaviors brought more room for growth. Wood already loved astronomy and engineering, and soon decided to get on this bus.
So in 1985, she switched from macro to stock research at Jennison, and in 1990 she also served as the company’s portfolio manager, always focusing on technology stocks.
Wood in his youth Source: Jesus Calling
Amid the hustle and bustle of technology stocks, she once again left the army.
Unlike the interest rate forecast, this time, the belief in violating consensus and looking for new things really played a role.
When Wood came up, he asked himself, other analysts must have studied good technology stocks for a round, and will not let them go, so what is left? What is left for me? What are my stocks?
She has the answer right away. So, very inclined, even somewhat paranoid, Wood began to work hard to find two types of stocks:
Those areas that are too advanced, so that people have not paid attention to them, and have not had time to swarm them;
Certain stocks are located at the intersection of multiple industries without any analysts following them. Wood believes that this may also be the birthplace of innovation.
She described herself as “a puppy looking for leftovers under the table.” She said, “When analysts and fund managers think that certain stocks are not enough or cannot be perfectly integrated into any portfolio, they usually take a second look.” They may be temporarily undervalued, but over time, Exponential growth may explode.
When studying stocks, Wood didn’t have any fixed procedures or routines. He just greedily took all the information he could touch, digested and judged it. Lisa Shalett, the current chief investment officer of Morgan Stanley, worked with her for a while, recalling:
“Cathie’s curiosity seems to be never satisfied. She eagerly absorbs research results from various channels, large and small, and works tirelessly 24 hours a day to ensure that the team has the most in-depth research and the most unique Views.”
Sometimes, she even listens to what she says intuitively. For example, when investing in Reuters, it is generally difficult for people to understand this “published database” business model-collecting data from financial companies and then selling all the data back to them. What is this?
Wood herself is not good, but she thinks this model is very innovative. She later recalled: “At that time, I just thought it was doing a big thing. Now we know that this is the epitome of today’s Internet concept.”
As we will see later, this “reckless” investment style has been retained by Wood to this day.
That’s it, Wood has been in Jennison for 18 years. In the remaining few years, while raising her three children, she went further and further on the road of stock research, and also became more and more refined in her unique stock selection doorway.
Wood and the children Source: Jdifferent.
Tesla may be the most famous and most successful example.
Wood invested in Tesla five years ago. At the time, the stock price was about $50. In the past three years, Tesla has been ARK’s largest holding. Wood believes that Tesla is such a company “located at the intersection of multiple industries”, integrating robotics, artificial intelligence, and energy storage. Traditional automotive analysts “don’t know what to do.”
In August 2018, when Tesla’s stock price hovered at $320, Musk once considered privatizing the company and repurchasing all the shares at a price of $420 per share. Wood was the voice of the 1% when 99% of the market was bearish on Tesla. She immediately sent an open letter to Musk, predicting that Tesla’s stock price could reach $4,000 in five years, opposing the privatization of the company.
So far in that open letter, Tesla has released Model 3, and the stock price has soared from $320 to $3,500 (adjusted at a 1:5 stock split ratio), and Wood’s unique vision has also been verified.
According to the ARK 2021 investment report, in addition to Bitcoin and electric vehicles, Wood is now focusing on deep learning, next-generation gene sequencing, data center re-creation, and many other emerging fields. As always, he has not hesitated to symbolize subversiveness. Innovative vocabulary puts infinite enthusiasm.
Secondly, as Wood envisioned, ARK has never stuck to traditional indicators and rules from the analyst itself to investment strategy, and it has a full and wild style of play, but it is beautiful.
Traditional ETFs mainly passively invest in indexes, while Wood’s ETFs adopt active stock selection and active management strategies. This is very rare. Even when active ETFs are becoming more and more popular today, they only account for the total assets of US ETFs. Of 3%. As mentioned earlier, Wood dislikes indexes very much and thinks that measurement is past achievement.
Her employees are also completely different from the traditional fund. There are more than 30 employees in total. Few have Wall Street background or MBA degree. Most of them are professionals in different industries-cancer scientists, artificial intelligence analysts, game engineers , Even the captain. They don’t understand moving averages, they don’t understand momentum indicators, and some don’t even use Bloomberg terminals.
Wood doesn’t care about these, what she likes is the professionalism of different backgrounds and different fields.
She also seems to believe in the concept of “philosophy in a cafe” and manages the company in a very relaxed mode. The office on East 28th Street in Manhattan has no cubicles. Next to the bar-style high chairs, all the tables are arranged in a circle.Move around from the ground, communicate, talk, and be ready for a confrontation of thinking at any time.
Three rules, traditional asset management companies always love to conceal the “exclusive information” they possess, while ARK is completely different. Wood’s attitude is: transparency, openness, “information attracts information.”
Ark’s weekly “brainstorming” meetings can be attended by anyone, including industry experts and competitors. The team can share research results and cooperate with scientists, engineers, doctors, and other experts. This is a violation of many traditional fund companies and requires expulsion.
Not only that, but Wood also publishes research reports for free on social platforms such as Reddit forums, announces changes in holdings every day, and even personally discusses investment targets with netizens, which has accumulated a large number of loyal fans for him. She believes that this helps ARK reflect on the differences or misunderstandings with the market and better understand what is happening in the world.
06 Investment in ARK=Believe in God, Believe in the future?
The so-called apostate, people either regard him as a genius or laugh at him as a lunatic. The success of investing in Tesla is like a booster, making more people willing to believe that Wood belongs to the former.
So these three fires have buried a bit of fanaticism in the hearts of fans. It seems that Wood has already guaranteed the unlimited innovation prospects of his stock pool. Here, as long as the cost of time is paid, you can Get money in return.
But the more important point is that the above sentence, under the permeation of the concepts of God, faith, and the future, removes the cliché cloak. It sounds impassioned and inspiring.
Think about it, investing in ARK is linked to believing in the future. If Buffett and Munger’s version of value investing are the kingly way of empiricism, then the vigorous ARK statement is somewhat metaphysical.
In general, people are still fantasy animals, and they are always easy to believe in illusory things. You can not believe in Tesla or Bitcoin, but do you believe in technology and the development of technology? You can not believe in ARK, but can you believe in “God’s mission”? You say you are not a Christian, do you believe in the future? When ARK swears to describe the future, you can shout with the same volume to retort, isn’t the future like this?
After all, the Tesla, who everyone calls a liar, really did it, didn’t it? It subverted the entire auto industry, changing from metal to energy-what about Bitcoin? So optimistic about Tesla all the way to the current ARKWhat?
The power of this set of thinking is much greater than imagined.
Even if you suffer some hardships on the road, such as the net worth plummeting by 30 points or something… Some investors will feel that they are paying for the future. There are two paths in the forest, and they choose the one full of thorns. That one is the one who laughs the loudest at the end.
As of 3/8, ARK’s five best-performing ETFs fell nearly 30 points on average from their highs. The picture shows the flagship fund ARKK’s net worth curve
But it is true, who can say the future? Can a finite wallet really pay for infinite beliefs, even if the future is true, how far is the future?
For example, what will be the end of this year.
2021 is undoubtedly a severe year for ARK. Over the past few months, the inextricable links between ARK, Tesla and Bitcoin have almost led to a “triad” risk pattern. At the end of last year, Wood also told the media that he was determined to improve investors’ interests in the next five years. The money has tripled. Unexpectedly, only two months into 2021, the stock price will begin to turn down, and the start has been unfavorable.
The love for small-cap stocks is still a hidden danger. Some analysts give examples. 20 of the ARK’s ARK fund holdings are more than 5% of the outstanding equity, accounting for 45.45% of all holdings. ARK has become the largest shareholder of many of the targets. Once the market environment is bad or With the decline in the popularity of the sector, the net value of the fund may experience a sharp drop caused by the negative and liquidity risks.
People once again recalled the US stock market in the 1990s in the panic. The high-rise building made of bubbles collapsed overnight and buried a group of newly rising “asset management stars” in the rubble. under.
For example, Bill Miller, a star fund manager who has outperformed the S&P 500 index for 15 consecutive years from 1991 to 2005, suffered from Waterloo during the financial crisis in 2008. He was once described by the market as “nothing in the evening.” Guarantee”.
Another example is the mutual fund company Janus (the two-faced god in ancient Roman mythology). Between the end of 1998 and March 2000, it grew from the 20th largest mutual fund company in the United States to the 5th largest, and its scale grew from 3 billion in just ten years. The dollar expanded to 300 billion. Even Clinton, the former president of the United States, entrusted his personal accounts to Janus for management.
However, with the burst of the Internet bubble, the net value of some of its fund products plummeted by two-thirds, and the myth of “two-faced god” has disappeared. Like ARK, Janus also happens to have a special liking for technology stocks and small-cap stocks. It also happens to be a confident posture of looking to the future and attacking once it is optimistic.
Will today’s ARK become the next double-faced god? Will Wood now be the next Miller to fall to the altar? Or, they will become the next Tesla and Musk, through difficult days, and truly stand at the center of industry change?
More than two years ago, Musk spent a sip of marijuana and alcohol on the show, and spent Tesla’s most difficult days frowning. Now, is Wood also ushering in such a time?
After that, Musk really became a subversive in the automotive field. Traditional car companies had to turn around and chase after them. Will Wood like this?
Will there be more ARKs on Wall Street? Is a more transparent, more open, and more dynamic asset management industry taking shape?
According to God’s words, Noah built the ark. That year, the ark survived the flood. God said, “When I made the cloud cover the ground, there must be a rainbow in the cloud.”
Now that “following the trust of the Holy Spirit”, Wood has reached its seventh year of building ARK. The flood has turned into a storm in the financial market, and clouds and fog have blocked the view. Can Wood lead the entire ship over the flood and really set off the wind of industry change? Can she see the rainbow descended by God?