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Queen of the tech boom:
Investor
Cathie Wood
is CEO of Ark Invest
PHOTO: BRENDAN MCDERMID/ REUTERS
With her bets on disruptive tech stocks, US investor
Cathie Wood
(66) has become a superstar in the financial world over the past two years.
With its fund company Ark Invest and its flagship ETF Ark Innovation (ARKK), it was able to post massive gains during the Corona crisis and during the boom in technology stocks.
In the meantime, “Queen Cathie” even surpassed old master
Warren Buffett
(91) in terms of performance.
Nothing is left of that now.
Compared to the highs in February 2021, the actively managed fund has lost more than three-quarters of its value.
This year alone, the ARKK has lost more than 58 percent - a phenomenal drop.
Wood and her risk managers couldn't do enough to counter the slump in tech stocks.
They also seem to have been surprised by inflation.
Wood had long argued that deflation posed a greater risk to stocks than price increases.
Inflation figures in the USA and Europe are now beyond the 8 percent mark.
After the announcement of the current US figures last Friday alone, Wood's largest fund lost more than 7 percent of its value.
The current crisis is attacking the stock picking nimbus of the investor, who set out to explicitly focus on disruptive tech companies.
The largest positions in their main fund, which is still worth 8.5 billion dollars, include the electric car manufacturer Tesla, the crypto exchange Coinbase and the platform provider Zoom.
Their other funds, which focus specifically on robotics, mobility or fintechs, have also lost at least a fifth of their value this year.
The assets managed in their funds have now almost halved to just $15.6 billion.
Woods has gained a cult following, particularly among younger investors.
Above all, their extremely optimistic statements caused a stir and were repeatedly quoted in Internet forums such as Reddit.
Last year, for example, she predicted that Tesla would reach a market value of $5 trillion by 2026 – it is currently around $720 billion.
For Bitcoin, Wood even predicted a price beyond the million dollar threshold by the end of the decade (currently: around $27,500).
What is special: Even in this horror year, numerous investors entrusted her with fresh capital, according to Bloomberg, the Ark funds recorded net inflows of more than 167 million dollars.
This is "definitely quite unprecedented," according to Bloomberg's ETF analyst Athanasios Psarofagis.
"Most would probably collapse if they had the same performance, but Cathie and Ark have a strong following."
Wood continues to believe in her strategy despite the tech quake.
This time everything is different than in the dot-com crisis of 2000, she recently said, the sales of her portfolio companies are growing by 50 percent.
Wood has always emphasized that she chooses stocks for their long-term potential, and that what counts for her is the five-year perspective.
If you look at the past five years, Wood's top fund has increased by 40 percent.
However, the US stock market index S&P 500 rose by more than 60 percent in the same period.
So Wood's pick wasn't as good as if she'd just bet on all the big stocks.
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