Catherine Duddy Wood, better known as Cathie Wood is a successful American businesswoman and venture capitalist who has risen to world fame for her growth investing strategies at Ark Invest. Ark Invest is the investment firm led and founded by Wood in 2014, the company currently has more than $50 billion in assets under management.
Cathie Wood was born on November 26, 1955 in Los Angeles, California. She is the eldest of her siblings. Her parents were immigrants from Ireland. Wood’s father served in the Irish Army and the United States Air Force, also becoming a successful radar systems engineer. Likewise, Wood’s father was very dedicated to details in his professional life as an engineer, this attitude led him to encourage his daughter Catherine to always seek and discover the connections between things, developing in her a very analytical capacity.
In 1974, Wood graduated from Notre Dame Academy in Los Angeles, an all-girls Catholic private school. By 1981, Wood graduated with honors from the University of Southern California, with a Bachelor of Science and a Bachelor of Finance and Economics. One of Wood’s professors was the renowned economist Arthur Laffer, an adviser to the Reagan administration, who became Wood’s mentor.
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Cathie Wood career
In 1977, thanks to her mentor, the liberal economist Arthur Leff, Wood got a job as an assistant economist at the financial services company Capital Group, where she worked for three years. By 1980, she had settled in New York and taken a job with Jenniston Associates, the asset management arm of Prudential Financial, as chief economist, analyst, portfolio manager and managing director. Wood worked at Jenniston Associates for 18 years, earning a reputation as an investment portfolio manager there.
In the early 1980s, Wood made his economic positions felt in major debates in the investment world. She debated Henry Kaufman at the time because she believed that interest rates had peaked, a key event at the time for making investment decisions.
In 1998, with Lulu C. Wang, Wood co-founded Tupelo Capital Management, a New York City-based hedge fund.
Wood joined AllianceBernstein as chief economist for global issue strategies in 2001. There she would spend about 12 years managing $5 billion in assets. Wood’s work at AllianceBernstein was heavily criticized because the assets managed by her at this firm underperformed the broader market during the financial crisis of 2007 and 2008. These results were likely due to Wood’s investment style, which favors investments in growth companies over value companies. Growth companies, or companies with high growth prospects, are much riskier investments, more volatile and generally tend to offer negative returns during periods of economic crisis.
Starting your way alone
In 2014, after his ideas to actively manage ETFs based on disruptive innovation were labeled too risky by AllianceBernstein, Wood left the company to run Ark Invest. The company is named after the Jews’ Ark of the Covenant because Wood was at an annual Bible reading at the time. Ark Invest’s first four ETFs received initial investments from Korean investor Bill Hwang of family asset firm Archegos Capital.
In May 2021 Wood said “We needed to go public and seed capital, and Bill Hwang, hearing that I was talking about the company that I was about to start… was very intrigued, and very attentive to the stocks that I was looking at. we were interested. He was just learning about these kinds of actions.”
A big run in tech stocks helped propel Ark Invest into one of the top 10 companies that manage ETFs in the United States, leading more investors to take a greater interest in Wood’s funds and leave their money to him. will manage
In 2020, in the midst of the coronavirus crisis, Matthew A. Winkler, editor-in-chief emeritus of Bloomberg News, selected Wood as the best stock picker that year. Wood is known for making wildly bold predictions about technological change and the economy, as well as being an active and enthusiastic supporter of cryptocurrencies.
in the media
Wood received considerable media attention in February 2018, after she stated on CNBC that she believed Tesla shares would peak at $4,000 in less than five years, an increase of no less than 1,100% to the price of that stock. moment. Then, in May 2019, when Tesla shares fell 29%, Wood reiterated her conviction that Tesla shares would continue to experience amazing growth in the years to come. While Wood’s remarks were widely ridiculed at the time, Tesla’s stock price hit its target on an annualized basis in early January 2021, after a big rally runs through 2020.
In November 2020, Wood again came to the attention of the media after stating that she believed that the price of bitcoin could reach $500,000. At that time, the involvement of institutional investors in cryptocurrencies was scarce, and Wood pointed out that the arrival of these types of investors would cause the price of bitcoin to rise to record highs. At the same time, Cathie Wood pointed out that the interest of governments, such as China, in central bank digital currencies, or CBDCs, has only added more legitimacy to investments in cryptocurrencies.
By March 2021, two of the funds managed by Wood were in the list of the ten largest funds managed by women by total assets under management. However, Morningstar, the media in charge of reporting the news, explained that the percentage of funds managed by women remained at the same levels as in 2000, which evidenced the great gender disparity in the financial industry.
For its part, the Ark Innovation ETF, which trades on the stock exchange under the ARKK sign, made headlines throughout 2020, reaching spectacular returns of no less than 152% and receiving assets worth 9.6 billion dollars. It should be noted that 2020 was an atypical year for the world of investments due to the great growth experienced by the New York Stock Exchange and the Nasdaq Stock Exchange due to the great government stimuli to contain the coronavirus pandemic. Morningstar detailed that the strategy of the ARKK fund, the most famous of the Ark Invest funds, stands out for finding undervalued assets that can benefit from disruptive innovation. The ARKK fund is the fifth largest fund managed by women and focuses on technology and disruptive mid-cap companies.
Awards and honors
In early 2021, Wood was selected by Forbes magazine in its prestigious 50 over 50 list, made up of entrepreneurs and leaders, scientists and creators who are over 50 years old and who are making a big impact in the world.
Personal life
Wood lives in Wilton, Conn. She was divorced from her first husband Robert Wood, who died in 2018. She has three children, Caitlin, Caroline and Robert.
Wood is a devout Catholic and supported Donald Trump’s 2020 re-election campaign. Speaking that year, Wood said a Biden presidency could stifle scientific and technological innovation, allowing America’s tech competitors to emerge. with more force. Cathie Wood is also an active social media user, with a large following on Reddit, most of them young retail investors in new tech platforms like RobinHood.
In 2018, Cathie Wood donated funds for her high school to start the Duddy Institute of Innovation, which encourages young women to study disruptive technologies.
About Ark Invest
Ark Invest, the famous company founded by Cathie Wood is one of the most recognized investment companies in the world. Along with companies like BlackRock or Vanguard, Ark has carved out a place for itself on Wall Street and its name is synonymous with disruptive innovation and high-risk investments. In fact, the name of the company, in addition to referring to the ark of the alliance, is also an acronym for Active Research Knowledge.
In October 2014, Ark launched it’s first four actively managed exchange-traded funds, the Innovation ETF, the Genomics Revolution ETF, the Next Generation Internet ETF, and the Robotics and Autonomous Technology ETF. These funds were followed by the Fintech Innovation ETF in 2019 and the Space Exploration and Innovation ETF in 2021.
The company only holds two index funds, the 3D Printing ETF launched in 2016, and the Israel Innovative Technology ETF, launched in 2017.
What does Cathie Wood invest in?
ARK’s investment strategy focuses on investing in disruptive technology. These technologies include artificial intelligence, DNA sequencing, CRISPR genome editing technology, robotics, electric vehicles, energy storage, fintechs, 3D printing, and blockchain technology. The company invests in stocks that are expected to grow twice in value over a five-year period. From 2014 through 2021, the ARK Innovation Fund has averaged annual returns of 39%, three times the returns of the S&P 500 Index during that period.
ARK publishes current, transactional, and portfolio analyses, and also keeps its research reviews open to the public. In addition to its financial analysis, ARK employs computer scientists, as they can better assess the impact of disruptive technologies. Most of the firm’s financial analysts are millennials with no previous Wall Street experience.
Criticism of Cathie Wood and Ark Invest
Critics such as James Grant and Jason Zweig warn investors that if they chase Ark Invest’s inflated and bulging historical returns in the future they could be disappointed, as “hot” funds and thematic ETFs generally cannot sustain their returns over time.
Morningstar Inc has raised concerns among many that ARK has significant investments and large ownership in several of the assets that its mutual funds track.
A faithful believer of the bitcoin religion
In May 2021, Wood stunned the media again, this time in the midst of falling spectacularly from his all-time high of $63,000. Cathie Wood stated in an interview with Bloomberg TV that she expects bitcoin to reach a price of $500,000. At the time, Tesla CEO Elon Musk seemed to back down from accepting bitcoin as a means of payment for the company’s cars, but Wood still expressed confidence that “Elon will come back and be part of this system.”
On May 27, 2021, Cathie Wood spoke again about the drop in bitcoin and cryptocurrency prices, noting that this was due to excessive environmental concerns from the investor movement that emphasize corporate goals of social governance and sustainability ( ESG for its acronym in English). “A lot of institutional buying is on pause,” Wood said at the Consensus 2021 session, a forum on the cryptocurrency-focused website Coindesk.
In his appearance at the Consensus 2021 forum, Wood predicted that central banks would start buying crypto assets to diversify their balance sheets and that Elon Musk would be positive towards blockchain technology once environmental concerns about cryptocurrency dissipate. “He has encouraged more active conversation and much more analytical thinking. And I think he’s going to become part of this process,” Wood said, referring to Elon Musk.
An investor doing God’s work
As a devout believer, Cathie Wood believes she is doing God’s work by promoting her investments. However, not everyone thinks the same. In a note published by the Financial Times in 2021, it was indicated that she was the face of the speculative bubble that surrounded the technology companies that had prospered during the pandemic. The success of companies like Tesla and other technology stocks that the ARKK fund promotes, along with the massive flow of investor money that she brings to the market, has driven a combined value that has led to stocks in the fund that she manages becoming multiplied by twenty since 2020 alone.
This great speculation has meant that while Ark managed assets for 3,000 million dollars in 2020, in 2021 it was already managing 60,000 million dollars. This extraordinary performance has made Cathie Wood a cult figure among some investors. Wood’s critics say her fund’s bull run has been due in large part to a mix of self-advertising and “investment mania” fueled by high financial liquidity in the markets. Meanwhile, Wood’s supporters disagree: An image of his face with the slogan “invest with conviction” adorns a selection of fan-created outfits, while profits from sales of these T-shirts bearing Wood’s image Wood are donated to charity.
The recognition of innovation
“What happened last year was a recognition among fund managers and advisers that they were pushing innovation and technology to the side of their portfolios,” Wood explains at a monthly Ark seminar, referring to the success that her funds had during 2020. She extolled the stock characteristics of the companies her funds promote, such as music streaming service Spotify and telemedicine provider Teladoc Health. “Innovation has finally had a voice and recognition,” adds Wood in an interview for the Financial Times.
The open secrecy of Wood’s beliefs in the investment world is based on the name of the fund – a direct reference to the gold-covered wooden ark described in the book of Exodus and which according to legend contained the stone tablets of the ten Commandments.
In fact, Cathie Wood is a very religious woman who starts each day reading the Bible while she prepares her coffee. And as a person of faith who relies on it for her in her most trying moments, it has sustained her through the many market upheavals she has experienced over four decades of her finance career. “Each of these occasions was a time when my faith deepened,” says Ella Wood.
Born in 1955. Wood is the oldest of her siblings in a family of Irish immigrants. Her father joined the United States Air Force as an engineer. At the height of her career, Cathie Wood radiates congenial humor with her colleagues, most of them young researchers who track technological innovation and who are fervent believers that investors need to “be on the right side of change.” ”.
A bet that few paid attention to
During her early days as a financier, Wood covered up the information being published by companies, stock information that no one wanted, and which she later remembered. Even so, the concept of these actions evolved and ended up becoming the world wide web, the internet. These discoveries made her appreciate how underrated innovation was and how explosive its growth could be. This led her to formulate and shape an investment philosophy that has earned Cathie Wood a name and wide recognition in the investment world.
“Cathie is a dreamer by nature and she is a tireless consumer of research,” says Lisa Shalett, chief investment officer at Morgan Stanley who was Wood’s boss when she worked in 2000 at AllianceBernstein, a fund manager. “She can see a big trend and she has no problem being very patient, which is not a typical quality for many growth investors.”
That patience is a true mark of his career. Wood was only able to establish his own investment fund in 2014 when she was 58 years old. It was a difficult struggle in the early years, but she managed to shape her investment style, with her emphasis on disruptive companies that can shape the future. “This is where the world is going and innovation will be at the center of investment portfolios in the next 10 to 15 years,” Wood told the Financial Times.
Tesla is one of Wood’s picks that has performed really well. At the beginning of 2018, the automaker’s stock price was around $300. Wood surprised Wall Street when she projected a share price of $4,000 in five years. Since then, Tesla shares have experienced spectacular growth.
Overvaluation and skepticism
Skeptics however believe that the assets managed by Ark are wildly overvalued. Tech companies need to exceed the expectations that investors have and that is an area where things will get difficult. Even so, these appreciations do not stop Wood. She dismisses rumors that her investments are a bubble and speaks openly to investors reminding them that her investments are long-term bets. After all, it took Amazon’s stock price close to a decade to recover from the crash of the financial bubble of the 2000s, but investors who held on to Amazon shares eventually made big profits.
And either way, Wood sees everything as the work of God. “It’s not about me and the promises I can make. It’s about putting capital into God’s creation, in whatever creative and innovative ways possible.”
How much is Cathie Wood’s fortune?
According to media records, by October 2020 Cathie Wood’s fortune was about 250 million dollars.
Cathie Wood’s Big Bet
In order to understand Wood’s investment style, which as we have seen focuses on disruptive technology stocks, one must also understand the investment philosophy that she rejects. Wood believes that the investment style of index funds, Warren Buffet’s style of investing and which focuses on putting money into ETFs and funds that track major market indices like the Dow Jones and S&P 500, is a very conservative way of investing and is not suitable for the 21st century.
Instead, Wood and his team of analysts do very extensive research and look at high-growth opportunities within the market, then look at companies that could capitalize on that high growth. This has led to Ark funds having big bets on stocks like Tesla, Square, Zoom, Shopify, and companies that are cashing in on the tech revolutions we’ve seen over the past few years. It will work? In the long term, Wood believes so, although she herself is aware that in times of market volatility, her bets will face great volatility, so if one expects to have short-term returns, it would be best to continue betting on index funds., which tracks the overall performance of the economy.
Meanwhile, it seems that Wood’s strategies in the world of investments are paying off. With 500% returns over five years on some of her funds, many are happy to have invested with her. Many more are waiting to see how the drive for innovation plays out in the coming years and if Wood’s predictions come true, this will undoubtedly create many millionaires.