Cathie Wood Is the Face of the Bubble Market
If you listen to Cathie Wood, you’d think innovation is an exponential process without any one step forward two steps back. The champion of Tesla, Fin-Tech, genomics, 3D-printing and Autonomous Driving stocks is now the face of the 2020 bull market.
Sadly, when you are a prophet, people will do what you do, literally. The problem is what happens when some of your calls are no longer rational and veer too much into being bullish on your high conviction names for the wrong reasons? Cathie Wood’s Ark Invest expects Tesla to soar to $3,000 per share by 2025 on robo taxi service. At the Last Futurist we are becoming a Cathie Wood bear.
Tesla has a higher chance of going to $200, than it does to $3,000, at least in the near future. ARK Innovation’s ETF had a good year in 2020, yet so many stocks did. It wasn’t a normal bull market, it was a Fed stimulated quantitative easing bubble market.
It literally broke Capitalism and sends in a downward spiral of wealth inequality and debt to GDP doomsday generation projection. The macro economic picture for when the dust settles won’t even be clear for another two decades.
Who knew a 65-year old fund manager could become this influential and the mascot of Tesla? Move over Roaring Kitty (aka Keith Gill), Cathie Wood is in the house!
CEO and CIO of ARK Invest is now getting a lot of worship where the stocks she picks see tremendous gains, based on her Tesla predictions coming true in the craziest year for EV stocks (in a massive bubble) we’ve ever seen. But what happens when ARK doesn’t have such a great year?
Wood isn’t just a money manager though, she is literally an evangelist for these companies and the new technological world she sees them ushering in. She thinks “disruption” happens right away, and the time is now! I would too if I was a 65 year old fund manager bullish on the “exponential intersection” of many new technologies. The problem is, for those of us who have been transhumanists and futurists for years, one thing we know is it always takes longer than you think.
Cathie Wood is the perfect messiah for new investors who don’t know much about how the stock market actually works and are ready to invest in the new world of green technology, EVs and higher forces of artificial intelligence! She and her fund have heavily invested in social media promotion and research papers that seem to only inspire confidence in her choices.
If you follow the markets, you probably know about ARK, which has become the “It” investment house on Wall Street, albeit far from a typical one. Cathie hires a bunch of young people and trades millions of dollars each day for anyone to see in “disruptive” gambles.
ARK Invest was up 152% last year and over 45% every year on average over the past five years. When Tesla is the main event of each ETF, Cathie Wood’s business model looks like a billionaire scam that, by the way, is also bullish on Bitcoin, crypto and Fin-Tech companies that tether themselves to it like Square.
Cathie Wood has made hundreds of millions of dollars being a Tesla promoter. She now waves the banner for other stocks including Teladoc, Square, Roku, ExOne, Baidu, Trimble, Grayscale Bitcoin Trust, among the stocks with over 5% in ARK’s various ETFs. Tesla is of course in most of those ETFs.
The problem with “high-conviction” puppeteering is it’s not investing. It’s high-risk high-reward and it’s training Millennials and GenZ to be poor stock pickers.
It’s turning young citizens into amateur futurists who are too bullish on first-comers, who don’t understand how consolidation in new verticals takes place. Cathie Wood is however doing us all a great service, she’s giving a human face to new investors ready to trade on the public markets. Tesla has attracted a lot of first time investors from 2020 and even now in 2021.
The Church of Cathie is certainly one that believes in innovation and disruption. Let’s ignore that genomics, 3D-printing and even autonomous vehicles will take decades to mature. Let’s also forget the tremendous competition Tesla will face as a first-mover pioneer.
Let’s forget that Cathie waited her whole life for such an opportunity that 2020 afforded her. Even CNBC is tremendously polite about the incredible success Cathie Wood (and her billionaire friends) have achieved.
The Church of Tesla, like Cathie Wood, is one of great confidence, even in the face of purely speculative positions in companies that are pioneers rather than being winners in new sectors.
There is a difference, Cathie Wood. When a fund manger becomes an investing messiah that tells stories and runs narratives instead of dealing in the facts, we are creating a lot of ‘dumb’ futurists. We are creating a lot of speculators willing to treat the stock market like gambling amid their “high conviction” names.
Cathie Wood’s fame is as perverse as the K-shaped recovery. It is as perverse as America’s belief that in Tesla, it has the winner of the future of the intersection of the AV and EV market. It’s China, and in all things innovation from 2025 to 2065, it will be China. Near the end of 2020, even Cathie Wood suddenly became bullish on Chinese companies like Baidu, JD.com and so forth. You don’t say?
ARK Innovation’s ETF hit a ceiling in February 2020, and the bubble market started to fizzle. It peaked at $156.58 on February 12th, 2021. Today the ETF is at $121.70. Tesla? Down from the mid 800s, to the mid 600s.
ARK last year grew much faster than any fund company in history. In the Fed stimulus, big winners were created, not made. Not self-made, in fact, Cathie Wood. Cathie Wood’s team used social amplification on Millennial stock investors better than any other ETF fund.
Cathie Wood bet everything on Tesla and she won. Of course she denies the stock market is in a bubble. It’s not her job to be factual, it’s her job to spin those generational stories of ‘disruption’.
When the incentives to lie are more powerful on an internet that’s more of a data dump, something is very wrong with how we invest and moderate the internet. Billionaires know how to lie. From Musk to Chamath, they are pretty good at it actually.
Cathie Wood is getting a lot better at it too in 2021. When your marketing manager is your daughter, let’s just say Cathie Wood has found a formula she’s going to stick to with being a champion of Tesla and all things truly disruptive.
Cathie Wood is a fake futurist at the end of her professional career, one who is willing to create echo bubbles that will allow many GenZ and Millennial investors to lose their life savings. Tesla’s stock after its reverse split became one of the biggest social media amplified echo bubbles in the history of the internet.
While Cathie Wood and other billionaires profited from it, it showed the internet is becoming a place for scams at such an absurd scale it’s painful to even behold.