Cathie Wood has made a name for herself as one of the most active and popular American investors in the technology sector. She is the CEO and CIO of Ark Invest, an investment management firm popular during the COVID-19 pandemic, as Cathie was one of the most vocal supporters of the tech sector.
The launch of the ARKK Innovation ETF made it possible for retail investors to gain exposure to innovative tech companies at a low cost. Disruptive innovation is the name of the game for an investor in ARKK, an ETF full of cutting-edge firms from fields such as genomics, transportation, infrastructure, or artificial intelligence.
But ARKK (and Cathie) have seen their investments fading in 2022. The ARKK ETF is down considerably on the year, despite Cathie Wood insisting on some of the boldest bets on Wall Street:
Tesla trading for $3,000/share
ARKK earning 40% annual return over five years
Bitcoin reaching $1 million
Cathie Wood remains bullish on Tesla
Cathie (and ARKK) is very bullish on Tesla (NASDAQ:TSLA). She made no secret of it, and on March 2021, the investment firm Cathie is leading released a research report with a price target for Tesla’s stock of $3,000/share ($1,000/share) post-split, with a five years time horizon.
But that was not all.
She reiterated the bullish case for Tesla this year. Ark Invest raised the 5-year target for Tesla’s stock in April to $4,600/share ($1533 post-split).
Reality check in November 2022 – Tesla’s stock is down 49%.
ARKK to return 40%/year to investors
Last year, Cathie delivered a bold forecast for ARKK on national TV; it would earn a 40% annual return over five years.
She went on this year and raised the five-year return to 50%.
Reality check in November 2022 – ARKK ETF is down 67%.
Bitcoin to reach $1 million
One of the most famous predictions she ever made was regarding Bitcoin. Cathie Wood owns Bitcoin and said this month that Bitcoin will reach $1 million by 2030.
That would be the equivalent of a 67.5% gain a year. Moreover, it implies that by 2030 Bitcoin’s market capitalization will reach $21 trillion. As a comparison, the global money supply is less than twice that amount.
Reality check in November 2022 – Bitcoin is down 68% YTD, trading at $16,580 at the time of writing this article.
I’m not saying placing money with Cathie is a bad investment. Instead, I’ll leave it to Ray Dalio, the legendary investor, to explain it:
“To make money in the markets, you have to think independently and be humble.”
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