After a tumultuous 2022, Ark Investment Management is off to a strong start in 2023.
Ark Investment Management CEO Cathie Wood is optimistic about its strategy of investing in young tech companies.
After his exchange-traded funds fell 60% to 80% last year from 2021 highs, Woods spoke about the current stock market environment in a year-end commentary on December 29, 2022.
“We’re getting a lot of deflationary signals, but the Fed isn’t buying yet,” Wood said, referring to the Fed’s continued rate hikes.
“But the bond market will start to win over the Fed,” Wood said. “The bond market is telegraphing much lower than expected inflation and/or recession.”
That prediction seemed to come true on February 1 when the Federal Open Market Committee (FOMC) raised interest rates by just 25 basis points. That was less than the 50 basis points he had raised rates in December and the 75 basis points he had raised rates at each of their previous four meetings.
The Fed seemed to have been recognizing the deflationary signs.
“The bond market always leads the Fed, and the bond market is speaking loudly,” Wood had said.
“We’re seeing a lot of deflation coming our way,” he said, referring to lower commodity prices and retailer discounts.
“Normally the market would have responded by now, but it’s waiting for the Fed,” he continued. “First he will change the Fed’s rhetoric and then his actions in 2023.”
Wood’s top ETF is off to a great start in 2023
Wood’s ARK Innovation ETF (ARKK) – Get a free reportit’s up about 40% to start 2023, which is more than double the Nasdaq 100 (^NDX) . And she is optimistic about his future.
“We are the new Nasdaq,” Wood said in an interview on February 3 in Bloomberg Television.
The Nasdaq 100 consists of major technology stocks such as Microsoft (MSFT) – Get a free reportApple (AAPL) – Get a free reportand Amazon (AMZN) – Get a free report.
“While the ARK Innovation ETF’s largest holding, Tesla Inc., is also a top stock on the Nasdaq, the fund’s other large holdings are concentrated in smaller, newer companies like Zoom Video Communications. (ZM) – Get a free reportand manufacturer of cancer tests Exact Sciences (EXA) – Get a free report,” Bloomberg wrote.
“Cathie Wood says ARKK is ‘the new Nasdaq,'” author Holger Zschaepitz (@Schuldensuehner) tweeted. “Looking at the recent accident, she’s right, she may be right about the rebound as well.”
Wood also said that he still believes that the value of one bitcoin will reach $1 million over the next ten years.
