Cathie Wood sold $22.3 million of surging tech stock
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Cathie Wood, the well-known fund manager of Ark Invest, frequently takes advantage of stock surges to secure profits.
This week was no exception. She just sold a major tech stock.
Cathie Wood’s investment style has sparked a divide between her supporters and critics.
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Proponents see her as a trailblazer, applauding her bold investments in cutting-edge sectors like artificial intelligence and renewable energy. They argue that her forward-looking strategy positions her to capture the growth of transformative trends, setting her apart as a visionary in finance.
Critics, however, claim her performance doesn’t match the hype. They argue that her aggressive bets, while impressive in short bursts, lack consistent long-term results.
While her bold moves delivered a remarkable 153% return in 2020, they point to recent underperformance as evidence that she is more of a risk-taker than a reliable money manager.
Related: Cathie Wood unloads $10.5 million in surging fintech stock
Her flagship Ark Innovation ETF (ARKK) , with $5.8 billion in assets, is down about 9% in 2024 (as of Oct. 25), with a three-year return of negative 26% and only 3% over five years.
That pales in comparison to the S&P 500. The index is up nearly 22% so far in 2024. It's also up 38.7% over the last 12 months, 10% a year for the three years, and 16% a year for five years.
Despite these results, Wood remains a prominent figure in finance, buoyed by her frequent media appearances and a loyal fan base that affectionately refers to her as "Mama Cathie."
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What’s Cathie Wood’s investment strategy?
Cathie Wood focuses on disruptive innovation and investing in high-growth tech sectors like artificial intelligence, genomics, and blockchain. Her strategy emphasizes long-term potential that she believes will be transformative.
However, these high-growth stocks are highly volatile, leading to frequent fluctuations in Ark funds' values.
Related: Cathie Wood's net worth: The Ark Invest CEO's wealth & income
Investment research firm Morningstar has been critical of Wood and her flagship Ark Innovation ETF.
According to Morningstar analyst Robby Greengold, Ark's investment approach in young companies with limited earnings “demands forecasting talent, which ARK Investment Management lacks.” He noted that the fund’s results have swung dramatically between exceptional and disastrous.
While the potential of the high-tech platforms Wood focuses on is "compelling," Greengold questioned the firm’s ability to pick winners and manage the associated risks consistently. He concluded that Ark has yet to prove that its aggressive approach is worth the risks.