Ark Investment has become a heated topic in finance. Some investors treat Ark as a hope since they release their portfolio and analysis on a timely basis. Everybody can see Ark's moves that either they buy or sell their stocks online. Whether you agree with Wood's strategies or not, the result is astonishing—160% in annual yield.
Arkk's annual yield is outstanding among all actively managed ETFs. Surprisingly, an investment company whose ideology follows value investing rules can have such a big chunk of profit. But it really is. Maybe we should review what value investing is. Basically, value investing encourage investors to buy good companies with reasonable price and expect a long-term return. As we can notice, there are three points: "good companies," "reasonable price," and "long-term." In my opinion, Cathie Wood even does a better job than Buffett on these points.
Ark focuses on disruptive innovation companies. These companies have the potential to greatly improve people's lives and create value in the future, like biotech, autopilot, fintech, etc. Intrigutely, Ark pays a lot of attention to these companies' ability in cost control when they do research. Wood believes that these companies can speed up marketization as long as they can control their cost. Also, before the general adoption, startups that specialize in new technology are highly in danger. While these tech-startups are not publicly exposed, and Wall Street analysts are still balancing the profit and risk, their stock price normally in a relatively low section. Therefore, Wood's strategy of controlling the risk is to buy when a company steps out of the dangerous zone or when people gradually start to accept their product.
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