In 2014, Cathie Wood founded her own investment company. Seven years later, the 65-year-old manages almost $ 60 billion with Ark Invest. Young investors in particular are at her feet. Because it focuses on innovation – and shares its knowledge with everyone for free.
If there's a face for the new generation of investors on Wall Street, it is Cathie Wood. In the literal sense: Young Reddit and Robinhood investors order T-shirts and sweaters with the image of the supposedly best female investor in the world and her company Ark Invest on them and proudly walk the streets with them. “There is a certain personality cult around the 65-year-old,” says Sandra Navidi, ntv financial market expert in the ntv podcast “Wieder waswas learned”. "It stands out on Wall Street because most of the time there are only men at the helm of investment firms."
Ark Invest is only seven years old, but so far it has been an absolute success story. If you search for Cathie Wood on Youtube, you will find dozens of videos with or about her. And when the divorced mother of three explains in her own channel or on the major American stock exchange portals Bloomberg, CNBC or Yahoo which companies and ideas the future belongs to, what she thinks of the Gamestop madness and Bitcoin, and how she thinks about the situation Markets, millions of people are glued to their lips. And buy what she recommends.
"She embodies this typical New Yorker who is extremely smart and well-educated, but also incredibly ambitious and highly motivated at every stage and age," says Navidi. "She has three children and was already very successful in her professional career. She could have retired and made a few good years. Instead, she went into business for herself in her mid-50s and initially made many millions of her own money in her company stuck. "
A masterpiece called Tesla
"Cathie can tell me to jump off a bridge and I'll do it," is the kind of comment you read about Wood on Youtube or on WallStreetBets, the infamous investment forum on Reddit. Because the 65-year-old has successfully occupied a niche: innovation.
"It invests in disruptors. These are companies that usually come onto the market with completely new technology and a completely new concept," explains Sandra Navidi. "Let's take Tesla: Elon Musk didn't try to redesign the car. He came up with the perspective: I'll create a computer that has wheels. A completely different approach."
Tesla is Cathie Wood's masterpiece. In early 2018, a share in the automaker was worth roughly $ 300. At the time, Elon Musk spoke quite openly of a "production hell" and set up an assembly line in a tent in front of the factory in Fremont, California, in order to be able to produce enough Model 3s. Wood was not deterred by these bad news. Instead, it caused a shake of the head on Wall Street with a forecast that was ludicrous for the time: In five years, a Tesla share will be worth $ 4,000, she predicted. One of the reasons she cited was that the company's new AI chips were examined carefully. Tesla left the competition behind by three, if not four years.
Twentyfold value in the year of the crisis
Your forecast was a direct hit: Last summer, Tesla carried out a stock split. One became five stocks and the value was divided by five. In January it hit the new target of $ 800. Cathie Wood was proved right after three, not five years.
A bold bet that has paid off: In parallel with the price of Tesla shares, the five funds that she and her team actively manage at Ark have also increased in value incredibly. In 2020, the year of the Corona crisis, they increased it twenty-fold from three to 60 billion dollars.
The funds are clearly divided according to ideas and industries: In the largest and most important, the flagship, there are 35 to 55 companies from the innovation sector, Ark's lifeline. The second is all about autonomous technologies and robotics. The other three deal with the next generation of the internet, genomics and fintech innovations. Two index funds also cover the 3D printing industry and the Israeli startup scene.
Bet on Square, Shopify, Zoom and Bitcoin
Cathie Wood still has the most trust in Tesla. The beautiful electric car is the surface of Elon Musk's company. Among other things, it develops high-performance chips for autonomous driving, offers its customers its own insurance and is working on ideas such as using full batteries in the car and specially manufactured power walls as power storage devices and emergency power generators for your own home. Tesla is an automaker, AI, insurance, and battery company rolled into one. And according to a new analysis by Ark, the stock will be worth $ 4,000 or six times its current price in four years at best.
Because of these prospects, Tesla is by far the largest position in three Ark funds, each with just under eleven percent. Each one is a bet on the future. Just like the other companies and corporations that can be found in it: for example Square, the financial startup of Twitter boss Jack Dorsey. Or Shopify, the inconspicuous German-owned Amazon challenger. The video telephony software Zoom, which is part of the home office like sweatpants. And of course bitcoin and blockchain.
Information freely available
"There are technologies that can change our world sustainably and very quickly," says ntv stock exchange expert Navidi. "But not just our lives, but society as a whole. Many companies cost jobs because they make entire industries superfluous – for example the taxi business through Uber. We are socially, politically and economically ill-adjusted to these innovations."
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To see which ideas and which companies can turn our world upside down, Ark employs a small army of analysts. But they rarely come from the financial sector; instead, many have a scientific background. They are young women and men with degrees in math, cognitive neuroscience, politics, and public health. Epidemiologists, statisticians, chemical and biomolecular engineers who put startups and large corporations and their ideas through their paces and do not hold back with their assessments: they put their research online free of charge. Articles about Tesla's new AI chips are just as accessible to small private investors as reports about the best ideas of the year and those that are considered bad or outdated.
The trends of the future
Physical bank branches and freight traffic by rail? For Ark these are achievements of the past. Telemedicine, virtual health care, genome research, 3D printing and space travel – these are the industries in which scientists expect the next big thing. Sectors in which a lot goes wrong and in which it can take years for the first successes to materialize – if at all.
A risky strategy. One too risky for the asset management Cathie Wood used to work for. That's why she started her own business in her mid-50s. Successful so far. But it can also be very dangerous: This year alone, small and large investors have already invested more than $ 15 billion in Ark's five funds. But the more money they collect, the greater the pressure on the supposed revolutionaries to deliver. What if you can't?