We Study Billionaires - The Investor’s Podcast Network TIP334: Disruptive Innovation w/ Cathie Wood
Jan 31, 2021
Cathie Wood, CEO and CIO of ARK Invest, shares her insights on disruptive innovation, showcasing how ARK's ETFs have significantly outperformed the market. She discusses how market valuations often overlook innovation, the role of Wright's Law in forecasting future returns, and the five key areas of disruption ARK focuses on. Wood also delves into the transformative impact of technologies like AI and gene editing, and emphasizes the importance of trust in business through innovative compliance tools. This lively conversation is packed with forward-thinking investment strategies!
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Benchmark Focus vs. Future Focus
- Traditional asset managers focus on benchmarks, treating them as the center of their investment universe.
- True active managers focus on the future, especially disruptive innovation, which is now outperforming benchmarks.
ARK Invest as Deep Value
- ARK Invest, despite focusing on disruptive technologies, shares similarities with value investing, like high-conviction bets and long-term focus.
- Cathie Wood considers ARK a deep value manager, discounting the future growth potential of these disruptive companies.
Tech Bubble and DNA Sequencing
- During the tech and telecom bubble, there was too much capital chasing too few opportunities too soon, and technologies weren't ready.
- DNA sequencing exemplified high costs: the first whole human genome cost $2.7 billion, but now it's around $600.