When Cathie Wood left to create ARKK, analysts and investors touted that this tech heavy fund would outperform and essentially be the Second Coming. However, things seem to have blown up in their face and a savvy fund in SARK was created as an inverse fund .
Since Cathie Wood has taken the reins, #AARK has had a total return of -55% and a YTD return of -66.47% return. At one point they were down a full -88% return. Why has this ETF failed to create any value? The easy answer is that Cathie Wood has really know knack for proper investing, mostly building her fund around a pure hope that overvalued tech would continue to pop. She somehow hasn't listened to the classic Warren Buffet strategy of buy low sell high. Instead, she bought into tech stocks boosted and created during COVID. She decided to implement the buy high and sell at market low strategy.
Also, Cathie Wood had called for BTC prices to be at a 150k price point and then doubled down even more to a 250k price point by the end of 2022. As BTC touches new lows, there clearly seems to be some overall misunderstanding of basic market dynamics, investing principles, and a completely flawed sense of how to invest. You can't create a fund on pipe dreams and pure gambling.
Even with this flawed strategy and terrible returns, investors continue to double down with ARRK, as it has pulled in billions of new money this year. I am not sure what would cause any investor to continue to invest into such a terribly managed fund. If a fund manager was making terrible projections and unrealistic price assumptions when the market clearly was giving clear signals, I would pull my money out immediately .
If all this wasn't enough, Cathie Wood is claiming the Fed is doing too much to curb inflation and expects the Fed moves to create Deflation. I am not sure how any experienced trader would think that the rampant uncontrolled inflation we are seeing now, is anything but alarming for market dynamics, that a recession is not eminent, and that a bubble isn't forming. If anything, the Fed didn't do enough earlier, and is still not doing enough now to curb inflation. Her comments just seem like a last Hail Mary belief to get the Fed to reduce its aggressive stance so that rebounds could continue.
Overall, this fund is doomed with this manager, and SARKK has reaped the benefits, boasting a sizable return this year shorting all her positions. For me, anything she touches is going to blow up and I get worried anytime she buys into a position I have already invested in.