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meet Cathie Wood

meet Cathie Wood

 a star-stock picker who invests in disruptive technologies.
July 4, 2021
3 min read
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meet Cathie Wood

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meet Cathie Wood

the above statement can summarize Cathie Wood’s investment philosophy and why she is a permabull in the technology space.

the 65-year-old Wood is the founder, CEO, and CIO of ARK Invest, a fund house that solely focuses on investing in disruptive technologies. ARK Invest is bullish on the exponential growth prospects of emerging technologies and aims to identify and invest in companies that are centered on DNA sequencing, robotics, artificial intelligence, energy storage, and blockchain technology.

the way Wood invests

founded in 2014 by Wood, ARK Invest, the seven-year-old fund house, has made headlines for its bold bets on companies like Tesla, Square, Coinbase, etc. basically, any company that is geared to disrupt their respective sectors. During a Forbes interview, Wood had said, "i have been watching disruptive innovation for my entire career — why don't I help my own sector along?" that’s what ARK is doing.

their contrarian approach to investing in emerging tech has generated a lot of wealth for their clients. the flagship ARK Innovation Fund has returned an average of nearly 45% annually over the past five years.

Wood’s bullishness on tech firms like Tesla, which have seen their stock price risen stupendously in the last few years. this has also made her a target of short-sellers and hedge funds who believe that the valuations of tech firms like Tesla are way overblown.

Wood’s Critics

short sellers who have bet against Wood’s flagship scheme have made a 21% return on their bet since the start of the year. the ARK Innovation ETF saw record outflow in September when investors pulled $905 million from the scheme.

while many have raised concerns around a market correction due to rising inflation, Wood believes tech companies are actually geared to benefit from such downturns. “we believe that disruptive products and services are better, cheaper, and faster, and thus, typically gain a significant share during recessions,” Wood says.

it comes as no surprise that she had a spat with Michael Burry, who also placed a bet against the ARK Innovation ETF.

Burry, who shot to fame for foreseeing the 2008 housing crisis and making money by shorting it, has been bearing on the valuations at which tech stocks have been trading.

when the news came out that he had a position against ARK, Wood took to Twitter to express her views on emerging technologies and why Burry might not understand them.

“to his credit, Michael Burry made a great call based on fundamentals and recognized the calamity brewing in the housing/mortgage market. i do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space,” Wood said.

for its limited existence of seven years, Wood and ARK Invest continue to have a credible track record, but can they sustain this performance over the long term? the jury is still out on that.