Cathie Wood: innovation have not wavered
Ark's official website posted Cathie Wood's latest letter to investors on July 10th.
Key points
Cathie Wood began by acknowledging the challenges facing the ARK Fund in 2024.The fund has underperformed, ahead of a market environment that is unfavorable to innovative companies, for a number of key reasons including:
High interest rate environment
Inflationary pressures
Economic uncertainty
Nonetheless, she remains confident in ARK's investment strategy, especially in light of falling interest rates, and expects the fund's returns to improve significantly.
Next investment strategies and focus areas
Artificial Intelligence (AI):
Viewed AI as a fundamental innovation platform that can create value for multiple technologies and emerging companies
Specifically emphasized Nvidia's importance in the AI space, calling it a "premier 'picks and shovels' play"
Innovative Companies:
Despite short-term challenges, Wood believes strongly in the long-term potential of disruptive and innovative companies
Believes the current market undervalues these companies
Macroeconomic Forecast:
Wood expects deflation in 2024, which could lead to lower interest rates
She believes this environment will favor innovative companies and ARK's investment strategy
On why did you sell Nvdia?
Wood specifically mentioned Nvidia's performance:
Nvidia's significant contribution to the Fund's performance since ARK's inception in October 2014
Recognized that OpenAI's "ChatGPT moment" had a significant impact on Nvidia
Predicts that Nvidia may face "short-term indigestion" as customers re-evaluate their AI strategies.
Despite this, ARK maintains exposure to Nvidia, such as a 1.39% weighting in the ARK Next Generation Internet ETF.
Current investment company valuations and investment methodology
Express the idea that you are an active investor
Buy companies that are not the most expensive
Anticipate potential returns that may come from future market conditions (e.g., falling interest rates)
Do you think innovative small caps will spring next?
$ARK Innovation ETF(ARKK)$ $NVIDIA Corp(NVDA)$ $Tesla Motors(TSLA)$ $Apple(AAPL)$ $Microsoft(MSFT)$ $Coinbase Global, Inc.(COIN)$ $Block(SQ)$ $Shopify(SHOP)$
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- JustinCooper·07-11Great insights from Cathie WoodLikeReport