Tuesday, 21 December 2021 14:16

Cathie Wood Is Playing With Fire

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Cathie Wood Is Playing With Fire

Submitted by QTR's Fringe Finance

If you read Cathie Wood’s letter on December 17, 2021 and were excited to invest because it suggested that Wood was assuring investors in her ARKK fund a 40% compounded annual return, you already need to realign your expectations.

Wood has updated her now infamous December 17, 2021 blog post/standup comedy skit in which she argued that “innovation stocks” were in “deep value territory” and in which she estimated specifically that their “flagship strategy” could deliver "a 40% compound annual rate of return during the next five years”.

Cathie Wood’s December 17, 2021 Letter, via Wayback Machine

If you invested in the hours after that letter, based on Wood’s statements, it would be a great time to revisit the letter as it stands today.

The same section of the letter now reads:

Cathie Wood’s December 17, 2021 Letter, as it stands today

The change is explained in a footnote where Wood says it didn’t apply to “any particular product or fund”, despite the fact that she references their “flagship strategy” in the first example:

In addition, the newer version of the letter has realigned Wood’s expectations from “40%” to “30-40%” and has added a lot of qualifier language, not the least of which is directing the return expectation away from their “flagship strategy” and onto - well, some vague benchmark of ARK Invest, in general.

What could have possibly changed in your investment outlook in 48 hours that would result in such a massive 10% delta, compounded annually, that you had just days prior?...

Cathie Wood’s December 17, 2021 Letter, as it stands today

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