The Glorious Days of ARK Invest has been passed...
I have published many short analyses on ARKK, and other funds managed by ARK Invest and Cathie Wood.
Some people may think I have personal problems with her or ARK Invest, but this is not true. I do research and analysis in the financial markets since 12 years ago. I started this when I was a 4th-grade medical student.
Since I was, and I am a bookworm, it wouldn't be a false claim if I say I have read more than 100k pages of books and financial articles in the past 12 years! (my best record ever is reading a 680 pages book in less than 2 days)
My favorite Topic in the financial world is Bubbles and the different stages of their development.
Why financial bubbles are so attractive? Because bubbles are the real game-changers! They create new generations of millionaires and billionaires while making many broke! I believe Bubbles are a "Zero Summation" game. From beginning to end no real value is created during any financial bubble!
Those who get on board in the primary stages of any bubble will be the winners if they are not greedy and take the primary capital out of the trade at right time! These people are not average investors, and usually are less than 1% of the investors' population.
I believe ARK invest did a great job between March 18, 2020, to February 16, 2021. ARKK their flagship fund made +305% in profits in less than 11 months! 3 times more than Russell 2000, 4 times more than NASDAQ, 6 times more than S&P 500 and Dow jones!
From a financial point of view, this is one of the best performances ever, no doubt. They achieved this in one of the best bullish rallies ever, the second-best in the last 35 years, after that 9 months from June 1999 to March 2000 when NASDAQ experienced a +140% growth. Do you know what happened after that? NASDAQ corrected more than 83% in the next 31 months, in the financial world it is called the ".com bubble" since then.
NASDAQ Performance in the last 35 years:
NET NET Fund an Example of "Thematic Investing" 24 years ago
It would be interesting for you to review the NET NET fund story between 1997 and 2000. The NetNet Fund, which is focused on Internet stocks, for three years rode the tech bubble into the stratosphere and ballooned from about $10 million in assets in 1997, a year after its inception, to about $12 billion when Munder closed the fund in April 2000.
Could ARK Invest be the next NET NET fund?
I believe to answer this question we should review their portfolio management when the market went south. For instance:
A: ARKK Feb 19th 2020 - March 18th 2020:
B: ARKK Sep 2018 - Dec2018:
C: ARKK Jan 2016 - Feb 2016
I think it would even be better to look at a bigger picture and check the ARKK performance from start in October 2014 to February 2021:
The bright side +668% gain in the first 6 years. (76 Months)
The dark side: losing 40% of whatever they had achieved in the past 6.5 years in the last 4 months:
By now you must know that she and her "Thematic Investing" project is in very very big trouble! Although she successfully managed to manipulate the market using the power of social media in the past 6 years, she forgot that this only works in a Bullish market. Usually, when bullish markets reach their ends, they start correction from the most ballooned assets!
In our case, you can check EV makers and Biotechnology companies! Most of them corrected more than 50% in the past 4 months!
For instance Tesla and Crisper, you can find here stories about how promising the future will be for these two companies:
Tesla: lost 39% of its value in the past 4 months:
Crisper: lost 56% of its value in the past 4 months:
I think I provide enough examples to show that the ARK Invest management team has very good performance in bullish rallies but they have no skill to manage their fund during previous corrections in the market! In the above example, you see during the past major corrections they always underperform and correct more than all four major indexes.
Things will become more interesting when you notice she invested 99.72% of the available cash, and she hopes for market recovery! The top 10 holdings of ARKK with almost 50% weight, have lost their value between 18-52% in the past 3 months!
If you patient enough to read this article you must know I provide evidence for all the claims!
In conclusion, I believe ARK Invest did not invest in the growth stocks because they believe in the future of these companies, they invest in these companies because they knew they were able to sell their stories to inexperienced investors using their pyramid social media networks and on the top of all Youtube!
The very same method used by Elon Musk in the cryptocurrency market using his Twitter account and Chamath Palihapitiya using SPACS...!
Don't forget the author of this article warned everyone about
1- EV makers correction as early as February 18th, 2021:
2- Bitcoin Crash as early as April 13th, 2021 when it was 63.8K:
3- Tesla correction as early as February 17, 2021:
4- ARKK correction February 22, 2021
5- The cryptocurrency market crash on May 14, 2021, exactly 72 hours before it happened. ( I updated my status on all my social media and TradingView and warned about the Whole Cryptocurrency Market will Crash soon)
Moshkelgosha
Some people may think I have personal problems with her or ARK Invest, but this is not true. I do research and analysis in the financial markets since 12 years ago. I started this when I was a 4th-grade medical student.
Since I was, and I am a bookworm, it wouldn't be a false claim if I say I have read more than 100k pages of books and financial articles in the past 12 years! (my best record ever is reading a 680 pages book in less than 2 days)
My favorite Topic in the financial world is Bubbles and the different stages of their development.
Why financial bubbles are so attractive? Because bubbles are the real game-changers! They create new generations of millionaires and billionaires while making many broke! I believe Bubbles are a "Zero Summation" game. From beginning to end no real value is created during any financial bubble!
Those who get on board in the primary stages of any bubble will be the winners if they are not greedy and take the primary capital out of the trade at right time! These people are not average investors, and usually are less than 1% of the investors' population.
I believe ARK invest did a great job between March 18, 2020, to February 16, 2021. ARKK their flagship fund made +305% in profits in less than 11 months! 3 times more than Russell 2000, 4 times more than NASDAQ, 6 times more than S&P 500 and Dow jones!
From a financial point of view, this is one of the best performances ever, no doubt. They achieved this in one of the best bullish rallies ever, the second-best in the last 35 years, after that 9 months from June 1999 to March 2000 when NASDAQ experienced a +140% growth. Do you know what happened after that? NASDAQ corrected more than 83% in the next 31 months, in the financial world it is called the ".com bubble" since then.
NASDAQ Performance in the last 35 years:
NET NET Fund an Example of "Thematic Investing" 24 years ago
It would be interesting for you to review the NET NET fund story between 1997 and 2000. The NetNet Fund, which is focused on Internet stocks, for three years rode the tech bubble into the stratosphere and ballooned from about $10 million in assets in 1997, a year after its inception, to about $12 billion when Munder closed the fund in April 2000.
Could ARK Invest be the next NET NET fund?
I believe to answer this question we should review their portfolio management when the market went south. For instance:
A: ARKK Feb 19th 2020 - March 18th 2020:
B: ARKK Sep 2018 - Dec2018:
C: ARKK Jan 2016 - Feb 2016
I think it would even be better to look at a bigger picture and check the ARKK performance from start in October 2014 to February 2021:
The bright side +668% gain in the first 6 years. (76 Months)
The dark side: losing 40% of whatever they had achieved in the past 6.5 years in the last 4 months:
By now you must know that she and her "Thematic Investing" project is in very very big trouble! Although she successfully managed to manipulate the market using the power of social media in the past 6 years, she forgot that this only works in a Bullish market. Usually, when bullish markets reach their ends, they start correction from the most ballooned assets!
In our case, you can check EV makers and Biotechnology companies! Most of them corrected more than 50% in the past 4 months!
For instance Tesla and Crisper, you can find here stories about how promising the future will be for these two companies:
Tesla: lost 39% of its value in the past 4 months:
Crisper: lost 56% of its value in the past 4 months:
I think I provide enough examples to show that the ARK Invest management team has very good performance in bullish rallies but they have no skill to manage their fund during previous corrections in the market! In the above example, you see during the past major corrections they always underperform and correct more than all four major indexes.
Things will become more interesting when you notice she invested 99.72% of the available cash, and she hopes for market recovery! The top 10 holdings of ARKK with almost 50% weight, have lost their value between 18-52% in the past 3 months!
If you patient enough to read this article you must know I provide evidence for all the claims!
In conclusion, I believe ARK Invest did not invest in the growth stocks because they believe in the future of these companies, they invest in these companies because they knew they were able to sell their stories to inexperienced investors using their pyramid social media networks and on the top of all Youtube!
The very same method used by Elon Musk in the cryptocurrency market using his Twitter account and Chamath Palihapitiya using SPACS...!
Don't forget the author of this article warned everyone about
1- EV makers correction as early as February 18th, 2021:
2- Bitcoin Crash as early as April 13th, 2021 when it was 63.8K:
3- Tesla correction as early as February 17, 2021:
4- ARKK correction February 22, 2021
5- The cryptocurrency market crash on May 14, 2021, exactly 72 hours before it happened. ( I updated my status on all my social media and TradingView and warned about the Whole Cryptocurrency Market will Crash soon)
Moshkelgosha
+250 Quantitative Stock and Option ideas every day!
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