ARKs and Ark Funds

[Scooterd]

An Ark is derived from the Latin word arca, meaning “chest,” which is akin to the Latin verb arcēre, meaning “to hold off or defend.” Noah's biblical ARK was built to provide security, buffett the waves, hold back the flood and defend within it  - It's precious Cargo.  

Excerpt: Howard Marks MEMOS - July 30 2021

For a piece of information to be desirable, it has to satisfy two criteria: it has to be
important, and it has to be knowable. – Warren Buffett

Regular readers of my memos know that Oaktree and I approach macro forecasts with a high degree
of skepticism. In fact, one of the six tenets of Oaktree’s investment philosophy states flatly that we
don’t base our investment decisions on macro forecasts..........

The reason for this is simple: to use Buffett’s terminology, we’re convinced the macro future
isn’t knowable......

Many investors think their job requires them to develop a macro outlook and invest according to its
dictates. Successful stock pickers or real estate buyers often make pronouncements regarding the
macro outlook, even in the absence of evidence linking their investment success to accurate macro
forecasts. Nonetheless, since macro developments are so influential, many people think it’s
downright irresponsible to ignore them when investing. Yet:

• Most macro forecasts are likely to turn out to be either (a) unhelpful consensus expectations
or (b) non-consensus forecasts that are rarely right.

• I can count on one hand the investors I know who successfully base their decisions on macro
forecasts. The rest invest from the bottom up, one investment at a time. They buy when they
think they’ve found bargains and sell things they consider overpriced – mostly without
reference to the macro outlook.

• It may be hard to admit – to yourself or to others – that you don’t know what the macro
future holds, but in areas entailing great uncertainty, agnosticism is probably wiser
than self-delusion.

Ark Funds.... (They are anything but Arks) Live by macro momentum, Die by macro momentum!!
I have met many a Cathie Woods in my life - It NEVER EVER ends well.

JMHO
- Scoot

It’s frightening to think that you might not know something, but more frightening to
think that, by and large, the world is run by people who have faith that they know
exactly what’s going on. – Amos Tversky

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure
that just ain’t so. – Mark Twain

[fenders53]

I'm not sure I see much evidence the funds are run with much emphasis on Macro factors. Most of her funds are way too large to be run efficiently, even if some of her thesis turns out to be correct years down the road. You can't buy and hold when purchases and redemptions swing wildly. You can't buy small caps when the fund is $15B or whatever it is currently. It's impossible to build a meaningful position. The fund should have been closed to new investors but they aren't giving up those management fees.

Even Peter Lynch knew to retire on top when Magellan got too large for his magic to work nearly as well.

[Scooterd]

(01-06-2022, 02:18 PM)fenders53 Wrote: I'm not sure I see much evidence the funds are run with much emphasis on Macro factors. 

Woods is a Thematic macro investor.

Cathie Wood is doubling down on her beliefs about inflation/deflation, the power of disruptors, and other macro themes.
Wood said that much of the bearishness on her funds is focused around inflation and interest rates going higher. However, the portfolio manager’s macro thesis focuses on deflation from innovation.

[fenders53]

I guess in some ways I am a thematic investor as well. I have a strong opinion certain sectors will outperform the next 5+ years and weight my portfolio accordingly.

I have no interest in the ARK circus but she isn't bothering me any. I agree with a few of her views, but that doesn't make her funds compelling as an investment.

[stockguru]

She buys the same crap over and over again. And she doesn’t care at what price. Not to mention she sells the winners to pay for her losers lol .

I would never invest on any Ark funds! But since she says long term let’s see where it all goes in 5 years. Maybe she won’t even be around that long ?

I honestly can’t even listen to her speak lol

[ken-do-nim]

I wouldn't care except I'm pretty sure my girlfriend has some ARK-something or other, and when I last checked with my brother he had a whole bunch of her funds.

[fenders53]

She just got hit with a ton of liquidations again this week. They will be forced to dump more shares at very low prices again. She can talk long-term but the customers will make that hard. The funds will be much smaller in a year. That was the only thing I saw coming with certainty. They close large funds for a reason.

[Scooterd]

(01-06-2022, 10:17 PM)fenders53 Wrote: She just got hit with a ton of liquidations again this week.  They will be forced to dump more shares at very low prices again.  She can talk long-term but the customers will make that hard.  The funds will be much smaller in a year.  That was the  only thing I saw coming with certainty.   They close large funds for a reason.

We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air.
We know, by the rules, that at some moment the Black Horsemen will come shattering through the great terrace doors,
wreaking vengeance and scattering the survivors.

Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time,
so that everyone keeps asking “What time is it? What time is it?” but none of the clocks have any hands....
The Black Horsemen did come, of course, and most of the guests were still at the ball. - SuperMoney (1972)

Lessons Cathie never learned.

I certainly feel bad for the retail investors who bought into her thesis.. But then again they are all big boys and girls.

- Scoot

"Risk is the forgotten man of this bull market". - John Bogle (Just days before the dot.com bubble burst)

“It’s different this time.” Lenders and investors invariably depart from time-honored disciplines when cycles move to extremes,
out of a belief that current conditions are different from those that prevailed in the past, when those disciplines were appropriate.
And just as invariably, they’re shown that cycles repeat and nothing really changes.- Howard Marks

[fenders53]

(01-07-2022, 11:14 AM)Scooterd Wrote:

(01-06-2022, 10:17 PM)fenders53 Wrote: She just got hit with a ton of liquidations again this week.  They will be forced to dump more shares at very low prices again.  She can talk long-term but the customers will make that hard.  The funds will be much smaller in a year.  That was the  only thing I saw coming with certainty.   They close large funds for a reason.

We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air.
We know, by the rules, that at some moment the Black Horsemen will come shattering through the great terrace doors,
wreaking vengeance and scattering the survivors.

Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time,
so that everyone keeps asking “What time is it? What time is it?” but none of the clocks have any hands....
The Black Horsemen did come, of course, and most of the guests were still at the ball. - SuperMoney (1972)

Lessons Cathie never learned.

I certainly feel bad for the retail investors who bought into her thesis.. But then again they are all big boys and girls.

- Scoot

"Risk is the forgotten man of this bull market". - John Bogle (Just days before the dot.com bubble burst)

Same with most every bubble story.  Some (maybe 10-20%) showed up very early and made a ton of money.  Many of them already rang the register when it faded.  The fund did OK enough for years and then exploded in 2020.  The FOMO gang shows up late like always.  A few have the sense to leave before they are down much and just a lesson learned.  The rest get crushed holding and averaging down.  And then a few happen to catch the bottom and make 10% in a month so it's a good fund to them.  Buying stuff that is overvalued is never easy if you hold it long enough.  

I think bitcoin is ridiculous, but I have friends that are up 1000-5000% and some of them took half of it off the table some time ago.

Long ago I was that young person that was averaging down after a 50% dip. Several of them are actually decent companies today, (Western Digital and Seagate), but I was leveraged some and didn't have 15 years to ride it out. Gambling in any form is dangerous and most have to endure a personal beating to understand the risk they willingly exposed themselves to.

[Scooterd]

Investors pull US$352 million from Cathie Wood's ARK Innovation ETF. The withdrawals come as ARKK languishes at the lowest in about 18 months

Excerpt -
The loyalty of Cathie Wood’s legion of fans may be finally waning, as the new year bloodbath in speculative technology stocks hands the star money manager a miserable start to 2022. Investors pulled US$352 million from Wood’s flagship ARK Innovation ETF (ticker ARKK) on Wednesday, according to the latest data, the biggest outflow since March. The withdrawals come as ARKK languishes at the lowest in about 18 months, having dropped more than 15 per cent (now closer to 20% after Today) since the start of the year. - https://financialpost.com/investing/inve...vation-etf

These Funds are improperly positioned for 2022 / 23.

• It may be hard to admit – to yourself or to others – that you don’t know what the macro
future holds, but in areas entailing great uncertainty, agnosticism is probably wiser
than self-delusion. - Howard Marks

• It’s frightening to think that you might not know something, but more frightening to
think that, by and large, the world is run by people who have faith that they know
exactly what’s going on. – Amos Tversky

I've met many a Cathie within the investment sphere, It never ever ends well for them.

[fenders53]

She is in deep trouble. She has no choice but sell to feed the constant withdrawals. 500M daily drawdowns are common lately. A few of her picks may actually turn out to be big in the end but the funds will never live to see it. These were extreme bull market funds and that isn't what we have now, or likely anytime soon..

[fenders53]

And it keeps getting worse. I can't even try to defend her anymore. What planet does she live on?

https://seekingalpha.com/news/3789355-ca...lue-stocks