Over the past year, ARK has been the subject of intense scrutiny. However, much of the dialogue has taken the form of short tweets, sound bites, and one-line quotes. Hoping to get a little bit more meat on the bones of ARK’s process, ETF Trends Director of Research Dave Nadig sat down with ARK’s Chief Executive Officer and Chief Investment Officer Cathie Wood last week for a deep dive into the issuer’s approach during this volatile market.
Dave Nadig: This may sound like an odd way to start, but, how are things going? Like you woke up this morning, it’s a Monday. You went to go look at your portfolios, you talked to your teams I’m sure. How do you feel the process is working?
Cathie Wood: Our process hasn’t changed, and it’s working.
Every day we look five years out. Every day. Let’s look at February, for example.
We were saying to people, “Look, keep some powder dry.” Nothing goes straight up, and certainly our portfolios as a whole had gone up dramatically over the previous three months.
So now there’s a side of me that’s saying, “Wow, this was a pretty severe correction over a very short period of time,” but there’s another side of me saying, “If we’re right, then this will not continue.”
How to Sell a Stock
Dave Nadig: You’ve been consistent in the strategy since I’ve known you – evaluate on 5 years. But things happen right? Just because you believe a company can return more than 15% over the next 5 years doesn’t mean you just walk away and never sell it, does it?
Cathie Wood: You’re right, we are selling stocks all the time, typically for one of two reasons.
The first reason is taking profits. Even if we think a stock is going to triple over the next year, if it’s just gone up 30% on good news over the last week, we’re probably going to be taking profits. We know disruptive innovation is controversial so we know there’ll be another side to a move like that.
The other reason we will sell is because something isn’t working out. For example, many people were shocked by our sale of Illumina. We’ve held it like our rock since 2006, between my time at Alliance Bernstein and now at ARK, but we noticed a few things: one, they weren’t driving down the cost curve at all. They had stopped cutting prices. That is a big no-no in the technology world and technologically-enabled innovation. Two, they started to lose some really important members of their team. These are big red flags. Three, they felt they had to buy PacBio, which meant, unlike their prior promises, that they were not going to be able to extend into long read sequencing, which is PacBio’s expertise.
The company changed, so our projections changed, so we sold out.
So we will sell, but something has to go wrong. In terms of profit taking, we’re selling simply because we know our portfolios are volatile and there will be another side.
Dave Nadig: So let’s play a little what if then. So on February 12th, you’re sort of at the top of your valuation range, right? If your target is 15%, then presumably, what happens if it went up another 15% from there? By definition, all of those estimates would now not be 15%, they’d be like 12% or something like that. Do you sell everything?
Cathie Wood: No, no, no, no, but we would be selling a lot of our names. And this was happening in February, and we were doing this, and we always do it: we added in more liquid names that are focused on innovation. They may not be pure plays or they may not be early plays. We were moving, for example, into large cap biotech stocks selling at 11, 12, 13 times earnings. We don’t think investors understand how much the convergence of DNA sequencing, artificial intelligence, and CRISPR gene editing is going to reduce the trial times and reduce the failure rates of trials, so we think the return on investment large cap biotech is going to surprise the heck out of investors…
Dave Nadig: So does that mean that in a sense, in any given innovation space, you’ve got young pure plays that don’t even have a product yet and you’ve got established players that are in fact moving and are investing in R&D? I mean, innovation can happen in IBM. It just doesn’t happen all that often in IBM.
Cathie Wood: It’s all part of the process. We have a valuation metric: 15% CAGR. When the CAGR drops below 15%, we start moving it down in position size. No stock in the top 10 generally can be below a 10% expected 5-year CAGR. And sub 10%, again, that will continue to drop a stock down. So even if we think a stock is a core position, we could go down to a smaller position and actually sometimes are willing to eliminate it in the flagship portfolio.
Dave Nadig: How often does that happen, practically?
Cathie Wood: Well Nvidia (NVDA) falls into this category. When we sold it out, our CAGR – the expectation of its return per year over the next five years — was something like 2%. So, we took it out of the flagship portfolio, left it in at 50 basis points or 1% in other portfolios. It has, like other stocks, come down in price, but it’s still only an 11% compound annual rate of return. So we’re not going to chase it. We’ve pushed our Nvidia model as far as we can, and we still can’t get it to work. It’s a very good discipline for us and it gives us fantastic perspective.
Building a Knowledge Factory
Dave Nadig: When you talk about building a model for Nvidia, you’re not really approaching this from the traditional CFA, discounted cash flow on analyst projections angle. You get folks with real domain expertise. Is there a chance you get myopic because of that? The old saw goes: every Telco analyst loves Telcos right up until their funds close. Is there a risk that you either get myopic and those folks get put in the difficult behavioral position of having to argue against their own jobs?
Cathie Wood: We think about that. ARK’s analysts are organized according to innovation themes, rather than sectors or geography. Within their respective themes, analysts have responsibilities for a number of different technologies. So in the case of 3D printing, we have an analyst, Tasha, and we had to get through a bit of the consumer hype and a correction. But the killer app for 3D printing turns out to be aerospace, particularly space. Cruise missiles are all 3D-printed. Did you know that? I didn’t know that. So that tells me hypersonic flight is going to be all about 3D printing – already crossing multiple technologies.
But Tasha also is very involved in all of our autonomous strategy. So 3D printing is really a subset of autonomous technology and robotics. And she happens to have responsibility for that.
But even if 3D printing somehow disappeared, Tasha is covering drones too! So again, robotics, automation, drones both for freight and groceries. She also is doing rolling robots. Anything autonomous, right, is in her bailiwick, and 3D printing is a subset of that. She also pulls together our autonomous taxi network models, which are fed by two other analysts.
So yes, deep domain expertise, but we also have so much collaboration going on that we are testing each other. We believe in collaboration and transparency. Our analysts work on their own focus areas, but also across themes. That means each team has to generate work that can be easily understood, dissected, and passed along. Analysts can build on each other’s work that way, but it also means we can solicitate and incorporate outside perspectives. It makes onboarding a new analyst easier too.
Dave Nadig: What about the flip side of that? What about the thing that’s on the horizon that you may not have anybody who has domain expertise, right? We don’t know what we don’t know.
Cathie Wood: Yes. Well, given that the only thing we do is innovation, it would be a really bad day to realize that we did not see something important coming down the path, but we plan for it. We have a brainstorm session every Friday with people from all walks of life: professors, venture capitalists, entrepreneurs, people who are trying to push the frontiers of knowledge forward as fast as possible. Many of these professors are in graduate schools doing their own research. So that’s one formal process. But we also get a lot of incoming questions from clients who are just naturally interested in innovation (after all, they’re clients), as well as what we call our “theme developers,” those who are in a part of our opensource ecosystem, including those I’ve just described, and those who we are interacting with over social media. We’ll get DMs, “Have you heard of this? This is a technology that I’ve heard is coming down the pike, or I’m beginning to look at myself, where should I go?” So I think our collaborative research ecosystem would prevent us from missing the next big thing.
Dave Nadig: That sounds a little bit kitchen sink, that you’re just going to listen to the loudest voice in the room or the professor who’s got the best PR department for his recent research. Are you worried at all that you can be swayed by narrative as opposed to what’s actually under the hood?
Cathie Wood: Not at all, because before we’ll invest in anything, we’ll subject it to Wright’s Law. Put simply, Wright’s Law says that for every cumulative doubling in the number of units, costs should decline by a fixed percentage. So in our studies on DNA sequencing, that’s a 40% cost reduction for every cumulative doubling. Think about the deflationary pressures there. It’s across these technologies. Battery pack systems? 28%. Artificial intelligence? 50%+.
If we can’t see costs getting down to a low enough level and the technologies themselves being ready, then we will not be spending much time in a space.
Just to give you a sense of that, we’ve never owned solar, not directly (although we’ve owned it indirectly through Tesla). The reason is it’s just now getting to a low enough cost, without subsidies.
Dave Nadig: But wouldn’t you make that same argument against Tesla? A lot of the Tesla haters point out that that company survived on government subsidies.
Cathie Wood: Again, we have a five-year point of view. We assume that our companies are going to go to market and that we’re going to be diluted. Not a problem, if we think they’re doing the right thing. We actually want that. And we want them to be first to scale exponentially. And so with Tesla, we regularly took out the subsidies and did a five-year analysis, and we were able to get to profitability.
Too Big to Succeed?
Dave Nadig: Let’s talk a bit about all the attention, and the flows that go along with it. You’ve had some pretty wild swings. Does this change your perspective on managing the funds? Do you have to think about the ETFs differently than your traditional Mutual Funds or SMAs?
Cathie Wood: Let me put some perspective around what’s happened to us. If you look month end to month end, I believe we’ve had one month of net outflows in our ETFs, and that was March, and was roughly $500 million. As a firm we had inflows in March. But I believe we also have people who have been waiting to average in, and “average down” has been one of our key messages.
In my opinion, we’ve had incredible retention. And given the publicity, (some rather harsh) I’m very pleased that our client base understands who we are, what we’re doing, and how we do it. A big part of what we do is educate, educate, educate.
As far as how we manage different wrappers, it’s simple: we have to be fair, no matter what. Believe me, we know this is scrutinized. There are no favorites, in terms of wrappers, no favorites whatsoever. An ETF that goes first in terms of trade rotation today will end up last tomorrow, and then we’ll have to work all the way up to first again.
Dave Nadig: So if the signal for today is “hey, we’re putting on 30 basis points more of Tesla today…”
Cathie Wood: Well, on a day with a lot of liquidity, a lot of volatility, a lot of action, I usually will say, okay, let’s do 30 basis points in Tesla. If we can, if it’s still below 10%, 30 basis points in Tesla, but let’s do tranches, 10 basis each, so everyone gets a shot.
Dave Nadig: So you go, trade, next fund, trade, next fund … and then you come back to the front of the line.
Cathie Wood: Right. And we are automating this because it’s critical. It’s critical. It’s the right thing to do.
Dave Nadig: It hasn’t just been ARK caught up in thematic innovation … you’ve attracted a lot of competition. Does that make you watch your back at all?
Cathie Wood: So I think there are real differences between our kind of fund and those kinds of funds. Most thematic funds out there are passive and use a scattershot approach. If it says something in the prospectus and it’s a pure play, it will probably end up in that thematic portfolio. That’s not how we operate. Our portfolios are actively managed and weighted by conviction which is informed by our rigorous bottom-up process.
With our portfolios, we’ve got Wright’s law supporting every stock in that portfolio. We have got a cost decline, an understanding that the price elasticity of demand is such that for every percentage point decline in price, demand will pick up. We see a lot of competitors looking at a lot of very young technologies out there that are not ready for prime time, not even in the next five years. So we’re not going to see the demand uptake. The pricing is too high.
Dave Nadig: To some extent this is just the age-old active vs. passive argument – indiscriminate buyers and sellers. Do you worry about that trade-off between active and passive? Because one of the arguments against the rise of passive is that we’re going to flush all the price discovery out of the markets, and therefore the opportunities for people like yourself and your team are going to evaporate because there will be no price discovery.
Cathie Wood: That’s why I started ARK! I saw how research and investing in innovation were evaporating in the public markets. While at the same time, in the private markets, the valuations put on innovation were rising. So the arbitrage opportunity was huge.
And I do think that’s what a lot of last year was about in terms of our performance. There was an arbitrage taking place. It’s not that the private equity market was wrong about valuation, it’s more the public markets that were wrong. Our research is all about surfacing those inefficiencies and helping our investors capitalize on not only the arbitrage, but on our core premise: these are some of the biggest investment opportunities we’ll ever have. We’ve had five innovations platforms, supported by 14 different technologies, at the same time. All of them, we believe, are ready for prime time. Truth always wins.
Dave Nadig: Does the transparency (in your case, pretty radical transparency, down to the daily trade blotter and your research decks) … does it get in the way at all? I mean at this point, every 10bps move you make gets dragged through the media, good or bad.
Cathie Wood: Our historical trades are our there for all to see. We are long-term active managers so we don’t have to buy something we like the next day if the price moves against us. We move on to another stock. We’ll get another opportunity to buy that stock in a few months when people forget about it and the market moves on because innovation is inherently controversial.
In addition, as a portfolio manager, I think the best wrapper out there is an ETF. Bar none. I only have to deal with investment decisions. I do not have to deal with flows! The ETF ecosystem out there — market makers, authorized participants, derivatives, sec lending, all kinds of ways to handle the volatility around our strategy, is marvelous. And that is why our spreads stay so tight. But all we have to do is make good investment decisions.
Dave Nadig: Are you at all concerned we’re seeing a repeat of the dotcom era? I know we were both running money through that period, and what I remember most about the wake – the sort of 2001-2010 period – is just the long desert for stock like Amazon?
Cathie Wood: In a word, no. We believe that the seeds for everything we are doing were planted back then. The seeds were all planted, they’ve been gestating and gestating. And yes, Amazon came hot out of the chute, along with eBay and a few of others. And many, many of them died. There was too much capital, chasing too few opportunities, too soon. A lot of the ideas were right, they were just 15 to 20 years too early. Right now, our five-year time horizons have these exponential growth trajectories happening in a way that was not going to happen after the tech and telecom bubble. The gestation period was just too long.
So yes, we have to be right that we’re close enough to prime time, and that even if the market doesn’t recognize it now, it’s going to. Remember how Jeff Bezos kept saying, “we’re investing now so that we can grab the lion’s share of the market.” It’s what happened, but the market didn’t appreciate it at the time.
Dave Nadig: But now the market does?
Cathie Wood: I think the market understands that psychology more now. And especially after Tesla. Elon’s willingness to invest aggressively, and not earn any money, and be made fun of for a number of years is paying off in spades. (And we think that story has just begun as well, even though it has had a very nice run. It is still the largest holding in our portfolio.)
We tend to average down and take profits all along the way. We trade around positions, but averaging down is a very important part of our discipline, just as I would hope it would be with investors in our funds. Think about your average price, and average down.
Look, I know a lot has been made about how many people entered after November 15th and may be under some water. The message here is simple: if you really believe in these innovative platforms (and please, read our research to derive some confidence), then I believe averaging in over time is the right thing to do.
Dave Nadig: You don’t sound very worried about the state of the market right now…
Cathie Wood: I love it that so many people are worried! I think that’s great, because the best bull markets are built upon a wall of worry. We’ve got one in spades right now.
And it can be painful. Believe me, I do understand. As an investor, I’ve gotten used to the internal dialog: “I don’t think our research is wrong. It’s now 20% below where I last bought it, I must like it that much more.” And the truth is yes, we usually do. And we should. So we average down. If you’re disciplined and just do that, I believe you’re going to be happy with your average price over time.
Dave Nadig: You’ve been on the record quite a bit lately about inflation. I get the argument that technology can be deflationary from the real human experience level, but aren’t there real issues around quality vs. cost? For example: the CPI, as we measure it, basically says cars haven’t increased in cost in since the 1990s, even though the sticker prices are up 200% — because you’re getting more for your money. But that doesn’t mean cars don’t cost more.
Cathie Wood: That is what transformative technology is all about! In the transportation sector, especially cars, we haven’t had transformative technology in a hundred years, right? If you look at the real price to drive a vehicle, a car per mile over the last 100 years, since the horse and buggy days, that number has been constant at 70 cents. We believe we are going to see a step function down to 25 cents with autonomous, and electric is a part of it.
I think people will be shocked. It’s going to force human driven ride hailing prices down during the next five years. And we believe that traditional auto manufacturers, if they stick with what they’re doing now, will go out of business because the demand for those cars is going down. Last year, globally, the passenger car market was down 14%, but electric vehicle sales were up 39%. This disruption has already begun. I believe the consumer is saying, “I want that.” It’s becoming cheap enough, it’s more environmentally sound. And it’s a better car from a performance point of view.
We think auto sales peaked in 2017, globally. And that they will, thanks to ride hailing, both human driven and autonomous, continue to fall. And with it, we think a used car prices are going to go through a tremendous decline as are well. We think that jig is up for traditional autos, and that that will be a part of the deflation story.
Dave Nadig: But do you think this is limited to just these technology effects? Or are you in the deflation camp regardless?
Cathie Wood: So it’s not just “good” deflation [value goes up], it’s also “bad” deflation [prices go down]. There’s a third deflation that’s brewing.
We’ve never seen anything like the coronavirus, right? Just shut the economy down. We thought we were going into depression. Everything shut down. But consumers didn’t shut down. Consumers turned to Amazon and online. They bought goods. That means goods soared much more than they would have in almost any other environment. Businesses did not expect it, weren’t ready for it, started ramping to try and catch up with it, have not been able to. And so I believe we are seeing double and triple ordering, especially in the housing market and a lot of the durable sectors. So I’ve been watching copper and lumber very carefully. Lumber prices in the last week have dropped 30%. Not $30, but 30%. I believe that confirms that there is a lot of double and triple ordering, and that the pricing signal is going to cause tremendous oversupply. It’s the opposite of what was at the bottom of the coronavirus.
At the bottom, we were onto this, seeing a V-shape recovery, and we put out YouTube videos and educated our investors. Having had that success, I hope it gives us the credibility to say, “we’re at the 180 degrees away from that right now.” We are going to be running into way too much supply by the end of this year. I don’t think it will be obvious in the very near term, but I think we’re going to have a cyclical decline in commodity prices.
Dave Nadig: So, just the supply/demand slinky getting stretched, and rebounding.
Cathie Wood: Precisely. And it will happen in other places too. Think about it: goods, durables and non-durables, make up one third of consumption. But where’s the consumer shifting the incremental dollar today? To services, travel, entertainment, restaurants. So that’s a double whammy if you’re a supplier into the goods space, because the pricing signal has been saying, “go, go, go, go, go, go” as your inventories have fallen to record lows relative to sales. And now I believe the opposite is going to happen.
Dave Nadig: But clearly things did happen that are going to impact the long-term economics perspective. Just think about the nature of work. We saw all of these technological accelerations. What do you think are the lasting impacts, both good and bad, from 2020?
Cathie Wood: Well, exclusively from the innovation lens – because obviously the social costs of the pandemic are enormous. But just from my innovation lens. Innovation solves problems, and that tends to be a good thing. Innovation got a nice boost.
But look at the so-called stay-at-home stocks. They peaked last summer, August, September, some in October, and have been cut in half. People were saying, “oh, everybody’s going back to work.” But that’s not true. I think we’re going to go to a hybrid system. From a quality of life perspective, it’s a big upgrade, right?
And yet, what does this mean? Does this mean we’re going to use Zoom less? I don’t know. You either pay for Zoom each month, or you don’t. I don’t think people are just ripping these technologies out. And I know that in our case — our brainstorm on Fridays with people piping in from all over the world, that’s never, never going back to all of ARK in-person and everyone else on video. Of course we’re all are going to be on video. It’s a much better experience for all of us.
Think about telemedicine. Medicare reimbursed seniors for telemedicine, because they were trying to protect them. Do you think seniors want to go back to the doctor’s offices after that experience if they don’t have to? So I think it’s changed the world – again, from an innovation point of view — for the good. And I think it’s going to cause much more creative destruction, much sooner than most would have expected.
Dave Nadig: But does this actually mean prices come down? Think of the enormous amount of money spent – systemically – on Covid vaccine development, treatments and so on. I’m not saying it wasn’t the right thing to do. I’m just saying it seems like a stretch to think this is going to make my health insurance premiums in the U.S. come crashing down. More the opposite!
Cathie Wood: It’s much more significant than that.
What I believe is going to happen to healthcare is what happened to advertising. I started my career as a newspaper analyst. I learned all about advertising. And I agreed with the Chief Marketing Officers who said, “I know that half of my advertising is working, I just don’t know which half.” It was true. So we saw the demise of newspapers, and in television, we’re about to go off the cliff there towards streaming. And the ad market shrank, and now it is starting to come back in aggregate.
Healthcare is even worse than that. I think more than half of our healthcare dollars in the United States are wasted and ineffective. Or even worse than that, doing harm. 10 years ago, women with breast cancer almost always received chemotherapy no matter what the rest of the regimen was. Roughly, half of those women should not have had one drop of chemotherapy. All it did was harm them. But we have tests now that are able to tell us which women benefit, and which don’t. That was the earliest example. And the healthcare system – because it was taking money away from those providing chemotherapy – was very resistant to believing this was true.
But now with DNA sequencing and artificial intelligence, we can see what’s true, without a doubt. So I believe it will be deflationary. I think one of the biggest surprises is going to be in medical retirement liabilities. They’re going to go down. Because we’re going to avoid surgeries. There are just so many examples: more than half of all thyroid cases with indiscriminate nodules are prescribed surgery, when they shouldn’t have been. It’s going to change.
Dave Nadig: Maybe I’m just a cynic, but I’m skeptical that, as noble as all that sounds, that this will show up in either consumers’ pocketbooks or necessarily in a particular investment. Consumers aren’t “buying” healthcare, like they shop for a TV. They get what they can get, no?
Cathie Wood: I think that has been the case, but I think consumers are becoming much more well-educated and are starting to ask questions, especially when it comes to something like cancer care. A hospital now has to detail everything. And I think consumers are now beginning to sort through and see where the costs are and saying, “wait a minute.” Even if their copay is $500 for a surgery, they’re going to take a close look and they’re going to want to see a detailed breakdown of costs before they go in.
Dave Nadig: But they’re not the payer.
Cathie Wood: It’s going to be in the payer’s interest. The insurance companies are going to want to find out who really needs this and who really doesn’t. I think insurance companies are wising up, too, and the government is wising up.
But, as the skeptic, you’ve identified the right problem. I have been shocked how reticent the healthcare world has been to adopting technologies that save lives and prevent harm. The Hippocratic oath? I’ve been shocked. But I think as more and more people understand how ill-treated our patient population has been. And some have hidden behind the law, saying, “Hey, we have to do this procedure. If we’re wrong, then we’ll be sued.” That’s what they hid behind. So there has to be tort reform as well.
Ultimately at the end of the day, I don’t know if that will happen, but I do know consumers are starting to take their healthcare in their own hands because they’re hearing these stories.
Regulating Innovation: An Oxymoron?
Dave Nadig: Boy, I don’t know. Politics works on such a short cycle, and innovation takes longer, right? I mean, you have a five-year time horizon and the election-policy cycle is basically two years…
Cathie Wood: … so delighting the consumer is becoming more and more important, right? That’s how Uber blew through the New York City taxi system, delighting the consumer.
Dave Nadig: But regulation is real. How do you think about that risk? Because you’re invested in companies that are going to be part of autonomous travel and you’re invested in healthcare companies and you’re invested in companies that are using crypto in interesting ways. All of these have these huge regulatory overhead, or at least regulatory unknowns attached to them.
Cathie Wood: Well, actually, that’s another thing that’s changed in recent years. I’ll give you a real example:
When we started our firm in 2014, the FAA was hyper-negative on drones. They basically said, “Forget it. We are not issuing regulations for this ridiculous idea. The technology is not ready.” Meanwhile, Amazon was on generation nine of their platform, and wasn’t allowed, until I think the last year, to fly its own drones, on its own property outside. They could only do it inside warehouses.
But it turns out, our regulators are now facing competition from regulators in the rest of the world who want their countries to be very open to innovation. They wanted to invite the capital in. So in the case of drones, it was Hong Kong, Australia, India, the UK, saying to Amazon, “Hey, Come here!,” and Amazon did! And guess what? The FAA finally woke up.
Dave Nadig: Do you think it’s the same for Crypto? It pains me to watch Canada get so far ahead of us on this.
Cathie Wood: Back in 2015 I went to a crypto conference of lawyers and regulators, because I wanted to understand what we’re up against here. And what I heard was state regulators, federal regulators, an FBI agent, lawyers, all scared they were going to prevent the United States from leading the next big innovation.
It was a big “aha” moment for me, and one of the reasons we had such confidence moving into GBTC at that time. So these externalities, a lot of them are around regulation. I think the competitive dynamic in the rest of the world is helping us in the United States. I think it’s been good. I think it’s why a lot of regulations have been focusing on the data. And now that we have artificial intelligence and big data and super computing power, this is a big help to regulators who are data-driven.
The Retail Investor
Dave Nadig: One thing I think your firm has in common with Crypto is the recent retail focus. Obviously over the last year or so you have generated a following, and that following has been identified as largely retail. Does that change how you either think about what you’re investing in, or how to put the process together so you can communicate to that audience?
Cathie Wood: Well, so my history at Jennison, that was 18 years, that was all institutional. At AllianceBernstein, the 12 years, it was all retail in the form of separately managed accounts primarily. But here? When we started, we were going to be retail because we were trying to educate, and give the retail investor a shot at some of the ideas that most investors have only had access to in the private markets. As we said, this was especially the case because the public world was going more indexed, with a dearth of research, and a dearth of investing in innovation.
So yes, retail. I find that institutions are so process-driven and so check-the-box-driven, that when a strategy like ours does not fit into a box, it does not take well in the institutional world.
Dave Nadig: They can’t put it in the Barra model, so they don’t know what to do with it. And it’s hard to put a person in a model.
Cathie Wood: Many, many commentators out there have personalized what’s going on at ARK. But what I think what we really want our clients and prospective clients to appreciate is innovation. That’s what it’s about. I am convinced, without a doubt, that our research on innovation is the best in the world. And I think it’s because of our sole focus on disruptive innovation. And I mean disruptive, transformative – we’re not a tech fund. I believe that a lot of what’s in your average tech fund is either going to be disrupted, disintermediated, or it will go away. We’re looking for what’s next, not what’s going away.
For more news, information, and strategy, visit the Disruptive Technology Channel.