(They say that market
bubbles can only be identified after they have popped ….)
ARKK is currently down 67.5% over 1 one-year according to CNBC. It’s off 56% YTD and about $5.00 above where it bottomed earlier in the year. This isn’t to rag on the fund and manager. But just to lend support to the idea that there certainly appears to have been a genuine “bubble” in this sector of the market.
What I’m unable to fully understand are the specific factors contributing to its continuing descent. I believe short sellers have a heavy hand here. And investors are discounting future Fed rate increases plus anticipation of a recession in their valuation of the sector. Since TSLA is its largest holding, investors to an extent may be discounting Elon Musk - a dangerous bet IMHO.
@bee mentions in another thread how higher interest rates impact speculative equities hardest. Posted for whatever thoughts or insights it might inspire..
Disclosure: Am holding a very small amount of ARKK as a long-term speculative play. Off 6-7% since averaging in.
Comments
So ryhmed with the late 90's, no? Next generation of investors/sheeple done learnt their lesson, maybe?
So...question for the class...let's talke about GAAP accounting or maybe better said the lack of it pertaining to most/many tech companies.
Do they or do they not pay many of their assocatiates with stock...what about intangibles...is that on the balance sheet? What happens to their "earnings" if you put those "true" expenses back on there? Aren't some of those companies another farce similar to ARKK...Can some CPA/Finance expert explain Salesforce, CRM, the rollup of over 60 companies to me and what is really going on there. I have no idea but am wondering, asking for a friend? Compare it to MSFT who DOES report using GAAP, I beleive.
And now those of us who don't suckle of the teet of the public tax payer with a pension have to fund our retirement in this piece of sheet casino?
Baseball Fan
I may be suckling of the teet (sic) of the public tax payer with a pension, but hear this, joker: During my twenty years of public safety service I typically worked two to four hours of off-the-books UNPAID overtime each and every day. I appreciated my job, and felt it was no problem to give a little extra. The taxpayers got their money's worth and then some from me. Up yours, pal.
To attribute what’s left of ARKK’s prior valuation to still gullible investors and / or shoddy accounting at this point in the game is to ascribe to those who initially ran up the valuation of these companies to their 2021 peak a degree of stupidity that I’m unable to comprehend. These are by definition highly speculative companies. But, trading at little more than 30% of what they were assessed at only a year ago, I think they are worth looking at on a relative value basis (ie compared to the broader market). But, perhaps Grantham is correct that the entire U.S. market is but a shaky house of cards. In that case, God help us.
And Heaven forbid that BBF is correct that retired public servants like @Old_Joe and myself are the underlying cause of all that ails the nation. In that case, all hope is lost.
Often no one notices the work we do...accepts the kids and sometimes the outside world.
Thank you for making a difference... much like my colleague whose life was cut short by COVID... Love you Tom...RIP... You made a difference in so many lives.
A Connecticut Story
Scroll down to #4 in the link for more details....
4. ARK runs aground
More to come? Meaning the downdraft? Who knows?
What to do, Derf ?
No disputing it was a bubble. That’s what my modest post meant to address. Is 70% off the price of a year ago still a bubble? Remains to be seen. We all try hard here to steer clear of partisan politics. There’s enough blame to go around when it comes to falling equity and bond prices. I don’t think either party owns those issues 100%.
Personal belief: I think we’ve all become too short term focused. Instant prices / up to date gains & losses / fund flows / interest rates / everything’s at our finger tips today, and trade on it we do. So what happens is that many markets “run to extremes” as the “smart money” latches on to the trend. ARKK’s meteoric rise is but one example. And it works in reverse too with short sellers owning the day now. Eventually over time prices sort themselves out to where there’s some rationality. I’m confident that in 5-7 years folks who bought ARKK at these prices will be glad they did. But it’s damn hard just to sit and not look. I think most equities will do better over 5-7 years. That’s the optimist in me. John Templeton was my very first fund manager.
? Who has made such an argument?
- “Please! I think the appropriate terminology is "feeding from the trough"
This sounds a lot like some of the stuff I’ve read in the IBD or editorial pages of the WSJ - though worded in somewhat less offensive language. Generally it’s associated with Democrats. But it can be partisan without reference to particular political party. My plea was to try and keep partisan politics out of discussions - especially threads I initiate. But I don’t run the board. So feel free to post anything you desire!
But please note that the thread was posted under “Fund Discussions”. And that the reference was to a failed fund. Now, pray do tell how we can devolve from Ms. Wood’s nearly defunct small cap ETF into bashing people receiving government pensions? Where’s the linkage - other than wanting to gripe on a totally unrelated subject?
Of course investing is political
He was talking about falling prices
Not to disparage those who have earned the pensions. A deal is a deal. No questions, I'm sure many have worked hard and served the public to earn them. But why is it they are guaranteed, many inflation indexed, no mattter what the markets do of which they are invested in and if the underlying investments underperform the taxpayer has to pony up, funding is cut for other public projects just to fund the pensions...is that the right thing to do?
My belief is that the pension returns should be indexed to say the past 3 years rolling returns. I do not think is right that the taxpayer has to be on the hook no matter what happens in the market. Or let ALL workers participate in a national pension, why just if you were say a politician for 25 years?
What really sticks in my craw is when those with the gov't pensions from a high tax state move right after they retire because "they don't want to pay the high taxes".
Baseball Fan