Star stock-picker Cathie Wood has not had a great start to 2022. Her flagship ARK Innovation fund that won her fame and fortune in 2020 has lost 40% so far this year, compounding the 24% drop last year.
Wood’s funds shot to prominence in the pandemic when tidal waves of cheap cash sent the kind of cutting-edge, speculative technology stocks she invests in into the stratosphere.
Since then, as money conditions have tightened, interest rates have gone up and the tech sector has lost some of its lusters, Wood’s funds have struggled.
Despite being down deep in red so far in 2022 ARK Investment Cathie Wood remains confident that her innovation-focused ETF ARKK will perform better going ahead. She is expecting a 50% compound annual rate of return over the next five years.
She remains confident in her research and the innovation theme. Reiterating her mantra of ‘innovation solves problems’, Cathie Wood said that the world today is seeing more problems with supply chain shocks, inflation, and Russia’s invasion of Ukraine, which she believes allows the innovation theme.
“Our ilk of stock is going to do very well, even if interest rates back-up a little more. We do believe cyclical inflation is near a peak,” she added.
Expectations of annual returns
Urging investors to continue believing in her strategy, Cathie Wood highlighted that during the peak her return expectations were 15% but now those are around 50%. “Prices are now down, but our return expectations have gone up. Over the next five years, we are expecting a 50% compound annual rate of return,” Cathie Wood said.
Cathie Wood continues selling
Star stock investor Cathie Wood has already been on a selling spree for Twitter stock. Over this year, Cathie Wood’s ARK has sold shares of Twitter from its ARK Next Generation Internet ETF, ARK Innovation ETF, and the Ark Fintech Innovation ETF.
The ARK Next Generation Internet ETF currently holds a little over 1 million shares of Twitter. While Fintech Innovation ETFs hold just over 300,000 shares of the company. This is after Cathie Wood has sold around 90% of her holding in the stock, through the last few months.
Elon Musk joins Twitter Board
Cathie Wood’s selling spree of Twitter stock continues as Elon Musk declined to join Twitter’s board, despite being their single largest shareholder.
The news was broken to the world yesterday by Parag Agrawal, the chief executive of the social media platform. Agrawal tweeted saying that the board had discussions about Elon Musk’s appointment last week and he was set to join his duties as a board member on Saturday.
However, Musk conveyed his decision to not join the board the same day. This comes just a week after Elon Musk had accepted the position and said he would “make significant improvements to Twitter in coming months.”
Despite his decision not to join Twitter’s board, Elon Musk will continue to remain the largest single shareholder of the company.
