I just listened to the Invest like the Best podcast with Cathie Wood.
One of the best podcasts I’ve listened too, I highly recommend it.
She runs ARK investments and has the same growth mindset of this board.
Goes into discussions on many companies, including NVDA, Tesla, Illumina.
I had a started position in ILMN and sold it because of valuation. I was an idiot. After listening to her talk on ILMN (which was before the great earnings yesterday), and I think she is correct, ILMN is going to be a great investment going forward. As the price of DNA sequencing comes down, the demand for it is going to skyrocket and ILMN has almost the whole market. ILMN has a good chance of growing revenue above 25-30% for years. (And earnings and cash flow even faster)
The ARK Invest website also has in depth white papers on the technologies and companies they think are the best investments because of innovation.
Jim (no position in ILMN, but will have one soon)
Was going to post about this too. I think Saul must be their secret investment advisor. Or they frequent these boards!
Kidding, but incredible podcast. Her thoughts on the exponential opportunity happening right now with many of these companies aligns with what we talk about here.
I will also dig through their research.
She talked a lot about what her greatest hits were with Illumina, Kite and Nvidia, but I’d like to know what her misses were and which investments didn’t pan out.
Her views on bottom up and top down investment research were spot on. Sounds a lot like Motley Fool to me as well.
Here is a link to a white paper she wrote in April, 2016 on Illumina.
From the paper:
" The real surprise will be a significant reacceleration in its growth rate during the next few years."
Right on the money.
“She talked a lot about what her greatest hits were with Illumina, Kite and Nvidia, but I’d like to know what her misses were and which investments didn’t pan out.”
I don’t know what her misses were, either, but in looking at the holdings of 3 of the active ETF’s( ARK-Innovation Ark-Industrial, and Ark-Web,) Tesla is the largest holding in each. I’m not sold on Tesla, so I wouldn’t invest in those. But the Ark-Genomic active ETF looks interesting to me. I have the special ability to lose money every time I invest in biotech, so it could be worth it to me to put money into it. It is definitely a sector with a huge potential market, and Ark would be better at evaluating those companies than I could ever hope to be.
There are a lot of Saul type stocks in the other 3 Ark ETF’s.
I’ve been teaching my son to invest, so when he stopped by today and asked if I got hurt in the Sh… er,
stock storm. I was too ashamed to admit I had 6-digit losses over the last few days, but put up the
tough guy routine like it was water off a duck’s back. When I asked him how he was doing, more than
once, he managed to politely avoid the question as if it were taboo.
When he left I pushed him for an answer, thinking I would have to dig deep to help him financially while
he finished his Master’s program and began his PhD in plant genetics.
“Well, I didn’t want to say anything because I’m up 31% in the last 2 weeks.”
“Yeah, right. How bad was it really?”
“No sh[kidding] I’m up 31%.”
“Really, in what?”
He named 4 or 5 companies, all of which – except for ILMN, I had no clue on that one – I knew had
blown by earnings estimates.
“So what’s your favorite?”
He’s mentioned Ilumina every other time I’ve seen him for the last several months. I paid attention
like I suppose most fathers do. “Interesting, Son.” < yawn > “Another beer?”
“How long do you think they will be a leader in their field? It is high-tech after all.”
“I don’t see how anybody could catch them in my lifetime, but I suppose it’s possible.”
Yep, I’ve been teaching my son to invest. What a joke! I guess class is starting for real now. I don’t
want to be late. I’ve got a lot to learn.
Yep, I’ve been teaching my son to invest. What a joke! I guess class is starting for real now. I don’t want to be late. I’ve got a lot to learn.
There used to be a TV series with the theme “There are eight million stories in the city.” True, but there is no way to know them all, one has one’s own little circle.
There are some 8,000 stocks in the market. My little circle has about a dozen.
There Are Eight Million Stories in the ‘Naked City’, Here Are 138 of Them
I was also shocked she talked 100% about how brilliant her people and investments were, and didn’t have one cautionary tale or mistake they made in an hour of chat.
And I was in disbelief when she said that VCs/other investors aren’t ‘doing the research’ because they asked her shop how they arrived at their $1 delivery figure for Amazon drones [from memory so don’t quote me] - as if asking someone how/what they did their calculations meant they haven’t done any of their own! Please.
You saw NVDA was going to be a big winner 4 years ago? Great, I saw Apple was going to be a big winner 14-15 years ago and told all my clients to buy it.
Doesn’t make me a genius, just means I got one right. It’s my job, after all…
I completely agree. The podcast would have been better if she showed some humility, maybe some examples of where they got it wrong, or saying something to the effect of we don’t always get it right, etc.
I just like the way they think.
The proof is in performance.
It looks like the main ETF is ARKK, which has been around since 10/31/2014. 26% return since inception, very good , considering it has over a Billion dollars in assets, and probably can’t invest in small companies.
Bringing this back to growth stocks, here is a link to the ETF page with the top 10 holdings. Some of which I haven’t heard of before. Potential source for ideas.
The number 1 holding is Tesla.
I mentioned this on NPI. One part of their thesis on Tesla is:
The cost to make combustion engine vehicles will go up every year. Tesla is making much progress improving battery technology and will continue to do so, the most expensive part of the EV. So a model 3 will cost less to make each year. So Tesla’s competitive position is improving every year.
I listened to the podcast. It seems like one of her main interests is in predicting the future. Sounds exciting, but I kept thinking, what about all these companies that are growing like weeds now? Why try to figure out if growth will accelerate to 25% (oh joyous day) with some large company (not to mention, how much of that is already baked into their 50 billion dollar valuation). Just invest in the companies growing 30%, 40%, 50%, or more every quarter. Especially since most are valued at just a few billion dollars each.
considering it has over a Billion dollars in assets, and probably can’t invest in small companies.
Perhaps you’re right, Jim. Poor fund managers.
Tesla is making much progress improving battery technology and will continue to do so, the most expensive part of the EV. So a model 3 will cost less to make each year. So Tesla’s competitive position is improving every year.
This doesn’t make any sense either.
Every car company is working on EV and batteries, either solo or in partnership.
Volkswagen has 20 different EVs among their various brands.
Why would Tesla win over all of them and all of everyone else?
They also have the disadvantage of massive cash burn as opposed to the $11.6Bn in Net income VOW made last year. [that’s probably Euros but close enough].
ps don’t short TSLA! Bubbles can always get bigger…
If BEV take over most of the market in industrialized countries within the next decade or sooner, Tesla does not need to have all the sales. 20% or even 10% would make them many times bigger than today. There will be more than one winner and even more losers. Today BEV represent less than 1% of the 100 million new cars sold every year.
ICE car makers will sneak into BEV slowly. Why? They can’t get enough batteries to sell massive numbers of BEV, they are not risk takers, and classic Innovators Dilemma stuff.
“Working” on EV and actually selling them are two different things. Plus the big Tesla SC network and the nearly invisible VW charging network (which Tesla will also be able to use) means any VW BEV customers basically are stuck in pure urban driving.
Outlook for Tesla the company , Tesla car sales, and TSLA the stock are 2 different things, why I am underweighted in TSLA but bullish on BEV , especially Teslas.
And I never short any stock, the odds are against you,
battery supply -Tesla making more car batteries than rest of world combined, With production increasing and another Gigafactory coming in China and maybe EU Big auto is not close to that, and turning over battery making to Asian oligopolies puts them at risk of price squeezes, a power shift away from them. Big auto will make BEV, but no more than they have to. Except to companies like BMW, Tesla is not a real competitor. Yet.
that was funny… its like first time your kid blocks your layup on the hoop or scores a birdie when you cant even hit par on the 10th hole!
Congrats you have smart kid and already outsmarting many investors!
BTW - What were the other four stocks that you didnt hear before…
I am highly skeptical of Ark Invest, even as more of a growth investor myself. Yes she sounded very convincing on the podcast but I often thought she was jumping to conclusions. It is really easy to throw words out there like innovation and talk about futuristic technologies, but often times the future doesn’t come as fast as we think it might.
I agree that she could have shown a little more humility, and did not seem to acknowledge the downside, which runs contrary to how we think at the Motley Fool.
While it looks like about 75% or so of her holdings are Motley Fool rec’s and her portfolio’s ETFs have a lot of overlap with my personal portfolio, I would not look to ARK invest as source of really insightful investment research, and seeing the overlap in our portfolios does not necessarily give me more confidence.
Perhaps I am biased from the first time I heard of her in this CNBC interview… I know this is a short clip but there are huge gaps in logic.
At a time where growth has done so well and the Nasdaq has completely outpaced the S&P over the last ~5 years, I would like to see more prudence in the way she talks about her investment approach.
She runs ARK investments and has the same growth mindset of this board.
One interesting point on ARK’s ETFs is that you can sign up to get a end of day list of all trades they made during the day.
For example today they were buying Chinese stocks - BIDU, BABA, JD & TCEHY.
A day early on TenCent, whose growth has slowed as the Chinese gov’t is limiting new mobile games. Stock down big today.
Cathie Wood on why Tesla should be priced at $2,000 today :