ARK Innovation (ARKK) - Buyer Beware!
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- Опубліковано 1 чер 2021
- ARK Innovation (ARKK) - Buyer Beware!⛱
ARK Innovation (ARKK) garnered significant news coverage last year when it returned more than 150%, beating the S&P 500 for the fourth year in a row. In 2021 ARKK trails the S&P 500 as a slight rise in interest rates and inflation pummeled growth stocks. The question that remains is whether Ark Innovation is a sound investment.
In this video we'll cover three things:
1. Why I'm not investing in ARKK
2. Why I might be wrong
3. How to approach ARKK if you do invest
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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
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Damn that was excellent advice back in June 2021. ARKK has been cut in half since then.
This aged well
I went full FOMO a few months ago, and put about $1000 into ARKK when it was like $150/share. So far, its looking like a mistake, and its one of my very few holding that is losing money for me right now.
So note to self: Never go full FOMO.
I bought in at the same time 😞
Never go full FUD. Remember ARKK is still up 150% since last year. Diamond hands baby.
Same here.
You can still sell off and get the loss and get back in 45 days later.
@@jeremymeyer5552 that makes no sense. The best strategy is buy and hold. Keep dollar cost averaging every month to ride the wave. Your net worth goes up as ARKK enter the next bull run cycle.
Thank you for putting my FOMO in check!
Any time!
aged like milk
Kathy Woods reminds me of Mary Meeker, one of the three Internet evangelists and Wall Street Stars of the second half of the 1990’s. As Mary Meeker put it at the time, “People didn’t understand the new valuations approach to Internet-based companies. Things have changed, etc., etc.” We all know how the Internet bubble of the 1990’s ended… I foresee the same future for ARKK.
Smart people can be right in the end but have the timing wrong. In investing that's the same thing as being just wrong.
I think Cathy Wood is right about the arguments she makes in favor of ARKK being a good investment. She is a smart investor with great analytical skills.
But she most likely has the timing wrong which makes ARKK too risky for my money.
Except the big gains were LAST year not this year. Know when to bail out
@@asommer518 That's the same thing I said about the timing being off.
@@asommer518 That's poor logic, gains are long term. It's a long term etf strategy. The pandemic exagerated investor emotion and now tech holdings are overvalued. In a few years we will still see Arkk likely outperform the market.
Rob, Thank you for your comments. I have (or had in 2021) about 1.5% of my portfolio in ARKG . I invested in this fund because I believed in genomics but had no idea on how to invest in it myself. So far a bad mistake on my part as most all my other investments are in Vanguard index funds. I plan to hold as I think the loses are in and I still believe in the technology. But I truly appreciate your views. Would love to hear them on genomics . - Mike
I bought in a few shares at what turned out to be their lowest price in years. I will hold it no matter what because its a long term fund anyway with potential huge growth. And if it goes to zero, I am not out much. I bought in on individual stocks that dwell within her funds like crispr because there definitely are companies in her etfs that will certainly explode in the next few years. But I took a small gamble on ARKK and ARKG.
Hi Rob. New subscriber and somewhat new investor in the market. Thank you for the time you spend helping. I have a small portion of my assets currently committed as such: ACTC 8; ARKK 15; BLNK 5; BNGO 5; CRSP 19; FCEL 3; HYLN 16; JKS 11; NIO 12; RUN 6. You can probably quickly tell I'm leaning towards Cathie Woods style of investing in innovation, but I'm always open to contrarian thinking and/or any thoughtful advice.
I watching your Video in January 2022 and ARKK is pluming $66 .
Excellent analysis of ARKK. Even though I have been a fan of Cathy Wood, ARKK, and her team. I am up slightly since purchasing earlier this year on a dip; however, this gave me a different perspective.
Impressed by your openness to differing opinions
How did this cult work out for you? did you manage to leave or still HODLing the bag :)?
excellent video … everything you said was on point…. We need more videos like this on UA-cam to keep people in check
Hi Rob, good work fomenting fear about ARKK. It's people like you that have kept the option premiums for ARKK trading very, very rich, and that's been very, very good for me. I engage in what is called the Wheel strategy on ARKK, that is essentially a covered-call strategy that relies on collecting high option premium on an equity while it is range bound. So doubters like you have been very successful in keeping ARKK's price from running away to the upside, while true-believers have been buying the dips and keeping ARKK from crashing. Meanwhile, I have collected enough premium rolling my ARKK options week-to-week to own a significant amount of ARKK shares at zero-cost basis. Keep up the good work! Remember about the wall of worry.
" So doubters like you have been very successful in keeping ARKK's price from running away to the upside" Wow, imagine had there not been doubters, ARK may just perform 100% a year rather than every couple of years.
You must be pretty wrecked by now as a ‘true believer’.
Fascinating as always! Thanks, Rob!
What do you think of PLTR?
I like the comparison to Bill Miller. The final "Ali vs Frasier" showdown at the end of the move The Big Short is based off of a debate between Bill Miller and Steve Eisman.
Another great vid! Nice dive into the fund. Not an investor in ARKK but I enjoy Wood’s market commentary and watching the buying and selling of her funds. Extremely transparent and she’s extremely confident in her strategy.
Edit: Her fund went heavy in Tesla when other funds wouldn’t touch it.
Very helpful video! And can’t agree more with ur ideas about deflation! Humans will never be satisfied.
One of your best!
Thanks for sharing your insight into this popular ETF.
Thanks for spending the time to explain your point of view
very good channel. Subscribed
Thanks rob!
So helpful!!!
Interesting. U were definitely right about this... Hopefully it recovers some...
Good video, Rob. I can't disagree with anything you've said.
I put less than 1% in ARKK last year. I could have been just as happy with 1 share, actually. I'll keep my shares at least until the end of October for the long term gains (if any). I don't care about the expense ratio or the turnover with possible future cap gains. The amount is just too small.
I'm 71yo with a 70/30 portfolio. I spend very little from the portfolio, so I can stand the losses. I went from 60/40 to 70/30 because even after the pain in 1Q2020, the only thing was to adjust my portfolio during the time of low capital gains or losses. I reinvested. 2020 was one heck of a good year for me, something I never would have expected.
I learned this lesson from 2008, 2001 and 1987 to be specific. I'll bet your viewers are good at managing their investments. Otherwise they would be on the doggycoin channels. :)
Nice background setting
I have a holding of ARKK for exposure to upcoming tech aiming to hold for 5 to 15 years. My thesis is to increase productivity one has to drop wages or invest in technology, I see the latter as more palatable. Cathy is looking for exponential growth companies, I expect we have started into the digital age of structural change where technologies are merging and analogue is going fully digital.
I also own Tesla, as I have worked in the automotive technology industry I see it as a value stock.
I thought the purpose of the stock market was to invest in new products and companies to progress.
I still have some time before I hit retirement age.
The purpose of the market (to me) is to make money, and (to me) buying companies that are expensive doesn’t achieve that goal.
Can we respect the fact this guy made this video back at the high of ARKK... I`m so glad I didn`t sunk into this hole. The price has now dropped to 1/3 since this video and inflation is rather brutal.
Really good, fair analysis. I do invest in a few of the ARK funds (1 fund in each of my two taxable accounts...2 funds in my Roth) but agree that the allocation % should be on the smaller side.
It's a work in progress, but def proceeding with cautious optimism. Cheers -
Love it
Thanks for your insight
I have a small position in arkk
In my speculation bucket
I enjoy your channel
I keep 1% in arkk- total 5% in all ark- it’s risk and play, allocating small percentages to these and more to vgt voo schd and all those big gains over time- you know vanguard expense ratios compared to ark over years adds up… gotta be careful with hype, for me that’s a small play/risk portion of my portfolio
Are you randomly investing the other 95% of your portfolio or do you.have set allocations in mind?
@@pspublic13 set allocations
What a good video!
I currently have ARKK and ARKG in small positions. It was doing well last year, but now it hasn't recovered from its "hey day." Not sure if I'm going to sell once I breakeven.
And that decision is why I left Legg Mason Value Trust more than 20 years ago. It's so difficult to know whether to stick with the fund. With an index fund you never have that issue.
If you think you're going to break even why wouldn't you buy more while it's down? Literal and philosophical question
No reason to sell now if you believe in what the funds logic is
Good Video. Time will tell.
Good video !
Can you compare ARKK to something like VGT?
Totally different funds. Look at the portfolios in each. ARK funds hold fewer stocks.
VGT is a great information and technology fund. It has been in my portfolio for quite some time. I wouldn’t touch ARK with a ten foot pole. Too risky.
@@bkozulla5841 same here
Which company generate profits when they come into being? Which company generate profit before they have grown enough? According to the “they do not generate profit” logic, no one should be investing in startups, and no new companies would come in to being.
I think a better way to think of it is whether you are able to stomach the volatility for owning companies which are still in growth phase.
There are plenty of young companies that make a profit. And if others are willing to invest in companies that lose money, why should I join them? I can sit back and wait to see who the winners are, and then invest. Yes, I'll lose out on some incredible gains (which is what's covered in the news), but I'll also lose out on some incredible losses.
@@rob_berger The important distinction being that there are a lot LOT more losers than winners.
Otherwise, it would mathematically make sense to throw money around into startups if the "win rate" was over 50%.
@@pspublic13 VCs and Softbank Vision Fund can play the game with startups. Fund 20 companies and wait for one to be a blockbuster IPO. It is really hard to predict which horse will be a winner for the average person with average funds.
Bought in last year when it spiked. Just waiting for it to go back up enough to sell it to recoup, or some measly gain.
I hope it works out for you.
With that mindset you should just buy more. If you don’t believe in the fundamentals anymore then sell.
@@amazinglats6020 Yup there are enough horror stories (some from me!) out there about timing the market. Never works in the long term.
I half half my net worth in 4 stocks. CHD, COST, NOW and RMD. The other half is in residential single family homes.
Black rock has a fund that’s for innovation
It’s a CEF ticker BIGZ pays 6% too. So far it’s traded sideways.
My question would be: if we measure up an ETF like Arkk with the S&P500 and her resent underperformance, do we not have to take into consideration, that the S&P also had very long phases of underperformance, in fact it underperformed the total market Index 18 1/2 years! (due to Brian Livingston in an Market Watch Article in 2019.
My research shows that total market & SP500 perform about the same long-term, plus or minus a few basis points. I agree that we can't judge too harshly ARKK's underperformance this year so far. It's too short term. But I am VERY concerned about it's long-term prospects given its investment in companies that make little if any profit.
I'm thinking if selling my ARKG ETF
I wish I watched this video before I invested in ARK. It's only 2% of my portfolio and it's down 30% currently. I plan to hold on to it until it becomes positive for me.
Hi Rob, what do you think about QQQ?
It's a Nasdaq 100 index
It is a good technology fund. 100 or so technology stocks. I like VGT better. It is more diversified and has done well.
Totally agree. The best index funds are those kept balanced ,diverse, and low expenses instead of others built on hype and one-dimensional realm. After all people gotta realize that never invest in sth just because it sounds good.
To me as a young investor ( 25 y/o ), I’m delighted to find out a great channel about investing. Thank you 🙏
So I’m basically screwed with my high $153 average and the $125 Put I sold.
Called it!
Rob sounds convincing, but I only agree with him half way. The best companies for the future are often not profitable at first. Amazon and Tesla are just 2 examples. Both at one time were under $10 per share. I think that ARKK will hurt during the bear market, but will thrive during boom times. I sold over 90% of my ARKK holdings during the run ups. I think ARKK is risky right now due to the entire market being overbought. But ARKK will have it's huge run ups some day. I only own a little ARKK right now, but will start adding every week it's below $60. When innovation booms, it really booms!!!
Just goes to show ya! Tread carefully and do your homework! Thanks Rob!
A very smart lady for sure! Many years ago the Mensa Society created an investment vehicle. It didn’t last very long, terrible performance. Cathy Wood reminds me a lot of Elaine Garzarelli. Remember her?
I'm hoping to get in if we can get under 100 it might be valued more fairly.
I bought a call for next year but to get in more I want it at 90. I'm tired of buying stuff and having it go down.
I wash sold at 80 and bought back in at 60. I increased my position and sold a 74 dollar call. I think Teladoc is going to be something phenomenal in the future as well as Tesla.
@@devnull436 see me in 5 years you troll lol
I got in at $60 😊
@@user-xu9nw4fv9c i got in at $15 in 2010
your best..and prescient
Steer clear of "Crashie" Wood!!!!! The ARK has sunk.
Ughhh, I use Morning Star’s star ratings when looking at eft’s 🙁
As Rob said, it's backward looking. Just telling you the same as any chart would tell you about its history. Fundamenatal analysis gives you an idea of how the company is being managed and what implications it can have going forward.
Really good, interesting and logical comments.
Ridiculously risky funds. These funds have too few stocks in them, the average PEs are way too high, and many of the holdings are speculative.
My cat could have made money the past 10 years. There is no reason to carry this type of risk.
Cathie Wood had her 15 seconds…
Berkshire Hathaway???
Now ARK is evolved in creating a Bitcoin ETF, entering into further risky territory. That seems like it might also be a reason to steer clear.
I have a small portion of my money in ARKG. It is a speculation and I am hedging against the possibility that they can find a superior treatment for type 2 diabetes. The genome research company that solves type 2 diabetes will earn fantastic sums of money. It's a long shot and I want to be in the game.
I am in same school of thinking it has preformed great for me and some little hick ups along the way is expected with this type of investment hopefully AKRG remain hick ups and not throw ups.
Just bought ARKK for the first time today. Dipped my toe at $37. I might double down in the mid $20's but it will never be more than 1% of my portfolio.
So with respect to innovation lowering prices. I think the point here was missed. Sure in the US. we often go heavily into purchasing the best thing possible. But the rest of the world and many many in the USA have benefited greatly from cheaper products, for every iphone there is a 400 dollar samsung that revolutionized phones
Beware of... What? The Future. Okie Dokie.
Your example in regard to TV is correct. However, it is not in the right context as far as deflationary that Cathie/ARK team refers to. Consider AI as an example. One "simple" implementation of AI is the automatic chat response that you receive when you query for answers. You often see this e-commerce sites. Couple years ago, this AI robot was really hard to use. You ask questions and the response was just way off. Nowadays, however, I find their answers are quite on point. Even on some of the automatic voice responses are quite good - the voice is clearer, it recognizes accents better and the responses are "smarter". As you can see, over time, as these AI get smarter and smarter (and it will due to the machine learning technology behind it), companies can technically cut a lot of resources and time that would have been used by customer services performed by human.
I quadrupled my money in ARKK in a year and a half and doubled my money in the other ARK funds. Just saying.
Someone quadrupled their money in tulips. That fact alone didn't make it a good investment.
Good entry point! But it's not going to be good going forward
Are you still quadrupling now? 😂
@@mirianadimitrova2112 Now down to just a double.
75 basis points, on $13.2 billion in assets. I can point out at least one winner in the room.
edit: I just saw at 4:38 they had $21.1 billion when this video was posted. Wonder what happened?
But the new TV's are possible because of Innovation! You are contradicting yourself and justifying Cathie!
Slow start…get it going faster….get to the info
Ark is really good at mARKeting their ETFs. I think there's an interview with Jack Bogle where he talks about mico-targeted sector managed ETFs with their 'Exciting' names that people are drawn to. Given enough time in the market the index funds almost always win.
Found it. A Forbes interview from 2013. ua-cam.com/video/zrCo0m5gSfc/v-deo.html
I wonder what Bogle would say about 2020 and 2021, both in investing/meme stocks and the pandemic in general. He always had very astute judgement on topics people get distracted on.
ARKK is OK. The EFT is betting on unproven technology that may be profitable 10 years from today. If you have a high risk tolerance, go for it.
5 years actually, not 10
You don't make huge returns till you take considerable Risk!
That’s a fallacy of idiosyncratic risks. All that matters are priced risks. Take a look at the Five Factor Model
This should be about investing..not gambling. Very few people get rich over night.
Huge returns? What about huge losses? You're only looking at one side of risk.
18:25 - 18:40
she thinks there is going to be hyper defilation she was the only one that got it right 30 years ago she might get it right this time but i still wont put $ in ARKK
I heard a really good comment that describes this ETF. To the moon and back..... it skyrocketed really fast but now it's back home LOL
Too funny, no, never guess a ticker. Too many stories of the wrong stock suddenly jumping on news based upon the wrong ticker symbol, a false cognate.
he said the same thing about amazon for years.
Glad I didn't buy last year lol I got in at $60 😊
Now it`s 40... ouch
Forbes sends his regards.
In May 2024… timeless advice… she just copied Motley Fool’s rule breaker methodology
Comparing Dogecoin with ARKK? LOL!
Loaded up on Tesla so it is about 30% of my portfolio. Bought in at the low $100s. Now up to $700. HUGE profits. You seem to be happy with about 10% per year. (P.S. I agree with you that Morningstar is garbage.)
It’s an extremely difficult concept to grasp, but good past returns does not indicate that a smart financial decision was made. You have taken on a ton of idiosyncratic, unpriced risks and have gotten lucky.
Tell us about your losses, in addition to gains
@@jlocke3482 I would if I had any but when stocks dip I buy more.
The biggest mistake I’ve made is buying ARK in Feb 2021. I jumped in quite heavy and since then ARK has completely destroyed my portfolio and my wealth. She’s got genius status but from where I’m sitting it’s been a very costly mistake. We talk about meme stocks, she’s got a complete meme ETF.
I hope you're still holding your ARK, and will continue for the next five years, at least. If you're already out then it's you that consider ARK a meme ETF and that's your mistake.
it wasn't ARK that burned you. It was the stock market.... that went whole hog into value and energy stocks. That tide is about to turn again in ARK favor. Its the nature of the market.... as in , it never goes straight up. Now its back to growth stocks again.
Wow, I feel for you getting in just as it was tanking. I was more fortunate going in big in early July 2020 and got out only a bit late. Inn my case it was life changing for the better. IF one had been listening to Cathy Woods on going UA-cam videos she was warning it was due to drop big in January 2021.
@@asommer518 have to admit.... she DID warn of a pullback... and it DID.
You can check Everything Money if you want to try the value investing route.
Your information is outdated - Tesla has been profitable from automotive sales excluding credits for a few quarters at the time of this video.
I never said they weren't profitable.
@@rob_berger no, but you were implying they make more from regulatory credits than from making cars, which isn't quite correct.
He didn’t say anything incorrect about Tesla in this video. You said something incorrect about the content of the video.
@@singed8853 asked and answered... 2 years ago.
Here's what he said:
"Tesla makes a little bit... Doesn't make very much selling cars, oddly enough".
Which is what I corrected by providing information about the profitability only considering automotive sales.
Now you should definitely do more research and get the facts right before jumping into a 2-year-old comment chain.
Yeah don’t bother with Ark, let us know how that works out for you.
Voo only 4 % pmsl
Active managers like Cathie Woods only outperform passive index funds like VOO 5% of the time over a 10 year period according to all the studies. Don’t buy ark it will eventually go to zero
Pmsl?
@@bspiderm piss my self laughing
He would have gotten destroyed as you probably did with the majority of arkk investors. To say this guy was spot on is to mislead. He didn’t make predictions here. He explained the glaring risks at the time. People like you were just blind to it. Now most everyone recognizes that the risks he mentioned in this video were very real and very consequential. Risk of a high interest rate environment on a stock portfolio heavily weighed on non-profitable companies.
For the record - I’m glad you lost your money if you in fact did. Proudly foolish people - it is nice seeing them get humbled by reality - regardless of their outward facing excuse making.
The ARK ship is sinking. If you watch their promotion videos, they are all amateurs.
Cathy wood, last years darling
making a come back!
Im pretty sure she's making Millions, while losing other people's money. So it's all good.
I owned Tesla and all the Ark funds. Made large returns on Tesla. But then I came to much the same conclusion on Ark. Sold all and moved on.
Tesla was a terrible pick in ARKK
Warren baby! If you don't know what to do with that cash ... let me give you my venmo address.