The controversial US investment celebrity Cathie Wood and her ARK funds have had great success with the Tesla shares. ARK investors had a great time in 2020, but things haven’t been so great in 2021 and 2022. Woods is described by the Financial Times as a “boom or bust investor” who invests in shares of disruptive companies that produce a lot of hope but no profits, such as Tesla. Her ARK funds have certainly benefited from the easy money policy of the last Covid-19 pandemic years. Just like cryptocurrencies, of which Cathie Wood is also a big fan.
Amid the Ukraine War and rising interest rates, Woods faces her toughest your in her remarkable career. Most investors in ARK funds are underwater. Critics argue that Cathie Wood‘s success owes more to this easy money policy than to her investment research or stock-picking qualities. The Street claims she has already fallen from grace. However, for her fans, she represents a middle finger for her retail following to the financial establishment. Her investors want to believe her stories of a better, brighter future filled with flying cars, green energy, and longer, healthier lives.
Shares of the ARK Innovation ETF (ARKK) finished 2021 at $94.59, but they’ve dropped to less than $60 this week.
As the US gears up for interest rate rises this year, Wood and the hot but unprofitable tech stocks that she favors are fighting against the tide of central banks. In the long run, Cathie Wood is undoubtedly right in her philosophy. The current world is at its end and needs disruptive ideas and companies. It remains to be seen whether this will translate into rising share prices in the short term.
