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This New ETF (SARK) is Betting Against Cathie Wood and ARK
The Short Innovation Fund is quite unusual. AFAIK, this is the only fund that shorts an actively managed fund.
Yes - That’s my understanding. I’ve followed this with interest for several months since they filed the paperwork with the SEC. SARK appears to have opened in mid November.
Wood has fervent followers and strong detractors. After reaching dizzying heights the fund has slumped this year. I’m wondering how she can run an open end fund in this manner. ISTM money will flee in bad times causing all sorts of problems for management and those who hold tight.
Wood has been loading up on DKNG - an online gaming / gambling company that went public only a year or two ago. Highly speculative. Got above $70 briefly within the past year. She reportedly bought a huge chunk at around $43 - $44 a couple weeks ago. This morning it fell briefly below $35. I owned a small bit once but got out. Already have more excitement than can handle investment wise - though suspect Wood’s call is the right one.
Here is comment from the Schwabie : " Not suitable for most investors. These exchange traded products (ETPs) represent unique risks, including leverage, derivatives, and complex investment strategies. These securities are designed for daily use only, and are generally not intended to be held overnight. Not for me, Derf
Wood has fervent followers and strong detractors. After reaching dizzying heights the fund has slumped this year. I’m wondering how she can run an open end fund in this manner. ISTM money will flee in bad times causing all sorts of problems for management and those who hold tight.
It must be very challenging to manage fund flows for the ARK ETFs. The funds generated eye-popping returns in 2020 which led to large inflows.
"The Ark family of ETFs shot the lights out in 2020. All five of the firm’s mainline funds produced triple-digit returns. Investors took notice. The firm pulled in $20.5 billion in net flows in 2020, representing 646% organic growth. As 2020 came to a close, the firm ranked as the 11th-largest ETF provider." Link
Their flagship fund, ARK Innovation, has dropped precipitously from it's February high. Outflows started in April (first time since Oct. 2019) and increased during the third quarter.
"ARKK's past 10 months are not an uncommon story. Fear of missing out following a stellar year for a fund can drive rapid inflows, and when the fund is unable to repeat history, investors start to lose interest. Investors who lack patience often suffer the most by buying at a high and selling after a decline." Link
Cathie Wood is also planning a new "ARK-on-steroid" fund that will be long-short (L-S). It will be long ARK-type stocks and short un-ARK (non-ARK? anti-ARK?) like stocks. If you think that ARK funds are suffering now, wait until this new ARK-on-steroid L-S fund is launched.
Here is comment from the Schwabie : " Not suitable for most investors. These exchange traded products (ETPs) represent unique risks, including leverage, derivatives, and complex investment strategies. These securities are designed for daily use only, and are generally not intended to be held overnight. Not for me, Derf
That Schwab disclaimer reads like general inverse ETF boilerplates. If the fund isn't levered in shorting, there's no danger in holding it for longer than a day. This fund is not like inverse SPY or 3x inverse QQQ or some-such. But of course, do your own DD before investing.
The purported ARK-Juiced fund is just Cathie playing with fire. I guess if a fund falls out of favor in ARK, it gets picked up in ARK-Juiced ... with the hopes that if enough people follow her into that fund, it'll move big and the 'main' ARK fund(s) can pick it back up again. A self-fulfilling prophecy that smacks of potential market manipulation masquerading as a legitimate fund, perhaps?
What's your take when the moratorium on Student debt payment ends end of January 2022? Is that when the meltdown in DKNG and the Cathie stonks goes hypersonic? Isn't that part of what is fueling this meme stock, gambling thing? Extra money to "play" with?
Or is it silly on my part to think that this debt will have to ever be paid? Best,
Or is it silly on my part to think that this debt will have to ever be paid?
I’m not following everything there. I have no particular interest in Cathy except I thought the subject of a new innovative fund might be of interest on a forum devoted to investing - especially via funds. DraftKings? Illustratuve of Wood’s investments.
Re: “the national debt”, it’s not as simple as “paying it all back.” Sovereign countries are different than individuals in that they can print money and back it with something called “full faith and credit.” You and I don’t have that capacity. So as long as the country’s GDP is growing and the country remains strong in other respects (ie defense, infrastructure, research capacity) than there is no need to repay all that debt. I’ll let the economists decide and debate what a reasonable debt level is. But No. I don’t think it all needs to be repaid.
I’ve been reading national news publications since I was 15. Goes back to Goldwater. And this horse *** from the right about “stealing from our grandchildren” has been around a long time!
Speaking of DKNG - I track it and it’s off 6.75% for the day at $32 plus change. Reports are Cathie bought a truck load at $43-$44 a few weeks ago - Whew! Here’s a stock that’s seen close to $75 within the past year. I think it was launched couple years ago as part of a a “SPACK”. Getting spanked today for whatever reason. No idea what the trouble is. But harmed by the market saturation with too many competing plus the steep taxes states are hitting them with.
Additional Thoughts - The stock has been subject to short selling pressure during past year. And now, with SARK opening, that pressure is probably even greater. Nuts. If Cathie buys a stock, it’s got a target on its back. Top institutional holders Vanguard and T. Rowe Price. I’d think safer to own it through a small cap fund.
@hank: that stock and others have become falling knives of late. Names and symbols withheld in the interest of privacy and not damaging my ego any further. I need a trip to DollarTree to pick up some bandaids before they go up to $1.25.
LOL. Too funny. DKNG lost almost 10% today. Sitting at $31+ change. It was the first stock I ever owned. Guess I escaped a beating getting out while still above water. Just 2 stock holdings left: RIO and WPM Both have been holding up pretty well - better than some of my funds today.
@hank: Jim Chanos just appeared on CNBC and explained why he’s been short DKNG for most of 2021. I found his explanations of why some companies are overvalued to be very comprehensible. He was on today because it’s the 20th anniversary of the Enron demise. That’s his most famous short.
Jim Chanos just appeared on CNBC and explained why he’s been short DKNG for most of 2021. I found his explanations of why some companies are overvalued to be very comprehensible. He was on today because it’s the 20th anniversary of the Enron demise. That’s his most famous short.
I appreciate that Ben. It’s funny. But Enron occurred to me just this morning. A highly prized energy company that fell to 0.
While The fact TRP is one of DFKG’s largest shareholders gives me a bit of faith, I looked at their Growth Fund (PRGFX) holdings today where it is positioned - but it occupies only a 0.27% weighting. My issue would be that any position I’d open (actually re-enter) would need be very small, making it of little potential value even if it jumps - plus one more damn holding to track. A second issue is that any advances are likely to be met by heavy selling as investors attempt to capture some of their earlier losses.
FWIW - Bill Fleckenstein’s daily (subscription) blog. He mentioned last night that the selling in the AARK type stocks has been particularly heavy of late. I’d think Wood’s funds must be in turmoil. While I enjoy wagering a bit on BB and think the DraftDings site pretty smooth … Here’s one instance where Peter Lynch’s advice to “buy what you know” doesn’t appear to hold true.
Just bought small stake in DKNG. Probably nuts. But since I got out at $42 it’s fallen all the way to $28.50 this morning. At just over 1% of holdings, it isn’t going to make a heck of a difference. Until the short sellers started pummeling it, it seemed relatively uncorrelated with most of the market - one of my priorities.
Cathy's down 7% today. I bought a tiny bit 15% higher a couple of weeks ago. I think she has the right ideas but got ahead of things. IT really depends on how good her analysts are in tech and biotech in particular
My son bought $2100 in 2018 and it quadrupled by last January. I tried to get him to lighten up but he refused. Unfortunately, he did listen to me and sold his TSLA a year ago May, after a 60% gain.. but he should have told Dad to butt out!
The problem with US money printing is it will cover debt, but if inflation gets hold and interest rates rise, the interest rate service will make the deficit worse and worse
Well, that didn’t last long. Friday I bought a little bit of DKNG @ around $28.50. Saturday Barron’s published a “Buy” recommendation on the stock attributed to a company called “Benchmark”. They predicted it would soon reach $50. Today, predictably, it bounced 8% + by mid-day. I sold all, locking in a 7% + overnight gain. Hate to “day trade.” OTOH - I have no control over what Barron’s publishes. Current price: $30.72 at 1:00 PM.
PS - This was inside the Roth, so no tax consequences.
Comments
Is that reflection of ARK owning over hyped, over bought companies?
I am thinking yes.
That said, shorting seems like just another hype.
That said, it appears ARK is still correcting, as it is making lower lows.
AFAIK, this is the only fund that shorts an actively managed fund.
Wood has fervent followers and strong detractors. After reaching dizzying heights the fund has slumped this year. I’m wondering how she can run an open end fund in this manner. ISTM money will flee in bad times causing all sorts of problems for management and those who hold tight.
Wood has been loading up on DKNG - an online gaming / gambling company that went public only a year or two ago. Highly speculative. Got above $70 briefly within the past year. She reportedly bought a huge chunk at around $43 - $44 a couple weeks ago. This morning it fell briefly below $35. I owned a small bit once but got out. Already have more excitement than can handle investment wise - though suspect Wood’s call is the right one.
Not for me, Derf
The funds generated eye-popping returns in 2020 which led to large inflows.
"The Ark family of ETFs shot the lights out in 2020.
All five of the firm’s mainline funds produced triple-digit returns.
Investors took notice.
The firm pulled in $20.5 billion in net flows in 2020, representing 646% organic growth.
As 2020 came to a close, the firm ranked as the 11th-largest ETF provider."
Link
Their flagship fund, ARK Innovation, has dropped precipitously from it's February high.
Outflows started in April (first time since Oct. 2019) and increased during the third quarter.
"ARKK's past 10 months are not an uncommon story.
Fear of missing out following a stellar year for a fund can drive rapid inflows, and when the fund
is unable to repeat history, investors start to lose interest.
Investors who lack patience often suffer the most by buying at a high and selling after a decline."
Link
The purported ARK-Juiced fund is just Cathie playing with fire. I guess if a fund falls out of favor in ARK, it gets picked up in ARK-Juiced ... with the hopes that if enough people follow her into that fund, it'll move big and the 'main' ARK fund(s) can pick it back up again. A self-fulfilling prophecy that smacks of potential market manipulation masquerading as a legitimate fund, perhaps?
Derf
Besides, if i want to own or short a company, I'll do it on myself and cut out the middle person.
What's your take when the moratorium on Student debt payment ends end of January 2022? Is that when the meltdown in DKNG and the Cathie stonks goes hypersonic? Isn't that part of what is fueling this meme stock, gambling thing? Extra money to "play" with?
Or is it silly on my part to think that this debt will have to ever be paid?
Best,
Baseball Fan
Re: “the national debt”, it’s not as simple as “paying it all back.” Sovereign countries are different than individuals in that they can print money and back it with something called “full faith and credit.” You and I don’t have that capacity. So as long as the country’s GDP is growing and the country remains strong in other respects (ie defense, infrastructure, research capacity) than there is no need to repay all that debt. I’ll let the economists decide and debate what a reasonable debt level is. But No. I don’t think it all needs to be repaid.
I’ve been reading national news publications since I was 15. Goes back to Goldwater. And this horse *** from the right about “stealing from our grandchildren” has been around a long time!
Additional Thoughts - The stock has been subject to short selling pressure during past year. And now, with SARK opening, that pressure is probably even greater. Nuts. If Cathie buys a stock, it’s got a target on its back.
Have a good evening, Derf
Most everything trashed today. Bonds held up.
While The fact TRP is one of DFKG’s largest shareholders gives me a bit of faith, I looked at their Growth Fund (PRGFX) holdings today where it is positioned - but it occupies only a 0.27% weighting. My issue would be that any position I’d open (actually re-enter) would need be very small, making it of little potential value even if it jumps - plus one more damn holding to track. A second issue is that any advances are likely to be met by heavy selling as investors attempt to capture some of their earlier losses.
FWIW - Bill Fleckenstein’s daily (subscription) blog. He mentioned last night that the selling in the AARK type stocks has been particularly heavy of late. I’d think Wood’s funds must be in turmoil. While I enjoy wagering a bit on BB and think the DraftDings site pretty smooth … Here’s one instance where Peter Lynch’s advice to “buy what you know” doesn’t appear to hold true.
With DOCU down like 50% this morning, has anyone checked on Cathie yet?
My son bought $2100 in 2018 and it quadrupled by last January. I tried to get him to lighten up but he refused. Unfortunately, he did listen to me and sold his TSLA a year ago May, after a 60% gain.. but he should have told Dad to butt out!
@Hank re national debt
The problem with US money printing is it will cover debt, but if inflation gets hold and interest rates rise, the interest rate service will make the deficit worse and worse
Derf
PS - This was inside the Roth, so no tax consequences.
CNBC