Ark Invest; Insider
Cathie Wood spoke out about the recent rise in short bets against its fund in an interview on Thursday with CNBC.
Ark Invest's portfolio manager and founder, The Ark Invest, said that the market is not in a bubble. Technology advances will continue to propel stocks higher.
Wood stated, "I don’t believe the market is ready to take this,"
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Cathie Wood is responding to a record number of short-sellers bet against her fund, which includes Michael Burry (of "The Big Short") fame.
According to a 13f filing, Burry opened a $31million put position in Ark Invest Disruptive Innovation ETF. This is in addition to his $731 million position in Tesla. It happens to be Wood’s largest holding and highest conviction stock.
Burry is not the only investor who bet against Wood. According to Koyfin data, short interest in ARKK ETF stands at a record 11.87%. This ETF is worth more than $2.5 Billion. Tuttle Capital Management has also filed a Short ARK ETF Prospectus with the SEC.
In an interview with CNBC, Wood said that Ark's investment strategy which focuses on disruptive innovation often includes buying profitless, fast-growing companies like Teladoc and Spotify. He also stated that the market is not in bubble territory.
Wood stated that "we couldn't be further from a bubble" and that the innovations around which Wood has centered his research...are barely off the ground.
Investment manager noted that the stock market is not in bubble because of falling SPAC prices, and negative sentiment from investors.
Wood stated, "I recall the late 1990's," after explaining that bearish investors believe that the stock market has burst.
Wood stated that in a bubble, the strategy would have been celebrated, but that there is no such thing right now. He also pointed out that investors who are not positive point to valuations as a cause for concern. Wood says that the scenario where a rise of interest rates would hurt valuations will not materialize because of a surprise return towards deflation. This is partly due to technological innovation.
Wood's five innovation platforms of focus are DNA sequencing, robotics and energy storage.
"The 20-years of tech and telecom bust that ended in tears and resulted in the tech and telecom boom were the time when the seeds of all these platforms were planted. However, that is not the current situation. Wood said that the seeds that were planted back then are starting to thrive now and that it's only beginning."
These technology platforms are all "about to experience S curve [growth profiles]" and feed each other's S curves. Wood stated that he doesn't believe the market is ready to do this.
Wood stated, "We've never seen a more exciting time for innovation in our history."
