“Our stocks are not in the benchmarks and we’ve focused our portfolios on names with the most convictions over the past year,” she said, noting that Ark’s US flagship strategy had tightened from 58 to 35 names over the past year, with a focus on ‘pure play’ companies.
Inflationary Rise Faces Nations
Speaking about the inflation wave facing many developed countries today, Ms Wood admitted that global supply chain problems had taken longer than she expected, but stressed that deflation, not inflation, was a much greater risk.
“This idea that the supply chain [pressures] and commodity prices would end up in long-term prices, I think that’s being seriously questioned now,” she said.
Ms Wood added that long-term bond markets “didn’t believe this inflation story,” saying the 3 percent yield on 10-year US Treasuries suggests nominal GDP growth will be between 3 and 4 over the next 10 years. percent will be. year.
“That story doesn’t account for 5.6.8% inflation unless we have 10 years of negative growth,” she said. “I think the tide is turning, and it can’t happen too soon for us.”
She expects retail giants such as Walmart and Target, which have indicated cost pressures related to inflation have increased, to reduce their massive inventories by lowering prices.
“What I think we’re experiencing right now is a huge inventory cycle, and Target and Walmart are basically telling us we’re going to clear our shelves by cutting prices,” she said.
Ms. Wood’s comments come after a dramatic turn in fortune for the Ark Innovation ETF after racking up gains of more than 300 percent to investors from the March 2020 market depths to a peak in February last year. Since then, the fund has been on a downward trajectory, with investors getting into the hype in the later growth stages.
Inflows, however, have remained positive, with net inflows of $1.3 billion ($1.8 billion) so far in 2022, according to reports, which she attributed to the fund’s commitment to transparency.
Tesla’s $10 Trillion Chance
Wood pushed back criticism that Ark’s incredible success in 2020 was the result of easy fiscal and monetary policy, saying that “the reason our portfolios soared back then was because innovation solves problems.”
As for some of her largest holdings, Ms. Wood said investors had unfairly crushed stocks such as Zoom, Teladoc and Roku.
About Zoom, which is down 80 percent from its peak, she said institutional investors missed the long-term growth potential of the video communications platform, predicting it would be one of only two companies to dominate the cloud.
“If institutional investors turn down Zoom when more than half of its revenue is now corporate, it just tells me they’re not doing their research,” she said. “They should know better.”
Zoom is Ark’s largest holding, accounting for nearly 10 percent of the portfolio. Ms. Wood said the company’s introduction of conversational AI and contact centers would be a “game changer” for the company.
“We’re going through the first rip-and-replace cycle in the enterprise portion of the tech stack since the early 1990s. We are moving from [a hardware-centric world] to the cloud that will be dominated by two companies: Microsoft with Teams and Zoom.”
Likewise, Ms. Wood remains a bull on Tesla, the second largest holding in the portfolio. She described that the electric vehicle company has the largest total addressable market in the world.
“Our size of the autonomous taxi rig market, we’ve estimated that market, from a revenue standpoint, to be nearly $10 trillion by 2030 from $0 today,” she said.
She added: “$10 trillion is about 10 percent of the current global GDP and about 10 percent of the current global market capitalization. This is a very big idea and Tesla is on pole position for autonomous taxi platforms in the United States.”
Asked if Elon Musk took on too much with the takeover of Twitter In addition to leadership roles at SpaceX and The Boring Company, Ms. Wood said she had faith in the “renaissance man of our time” as he surrounded himself with incredible people.
“I’m not worried about this. I’ve seen him multitask for the past ten years,” she said.
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