Cathie Wood’s biography: What is her investment style?
“In the world of the collaborative economy and networks, if you don’t give, you don’t get…. You can’t succeed on your own.”
Devoted daughter and exemplary student
On November 26, 1955, Catherine Duddy Wood was born in Los Angeles, California. The daughter of Irish immigrants and a devout Catholic, she learned from her father, a radar system engineer, the importance of the use of technology and the impact it can have on society.
Cathie Wood graduated with honors from the University of Southern California with a degree in Economics and Finance. During her time at this university she met her mentor, Arthur Laffer, a prestigious economist of the time who was an advisor during Ronald Reagan’s administration.
His career on Wall Street
Thanks to her mentor, Cathie Wood got her first job at the financial services firm Capital Group, where she remained for three years, and later joined Jenniston Associates, where she began to build her reputation as an investor, where she would remain for the next 18 years.
In 2001, Wood would join Alliance Bernstein as chief economist for global theme strategies. This working relationship would last for the next 12 years and she would go through a series of harsh criticisms as the assets she managed during the 2007-2008 subprime crisis performed worse than the market average.
These results were since, in her investment style, she prioritizes investing in growth companies over value companies. The result of this strategy is high volatility and high risk, which regularly yield negative returns during downturns.
The knowledge ark
Cathie Wood’s ideas about investing in actively managed exchange-traded funds, but with themes around disruptive technologies with high risk, but also, high growth potential, were not much to Alliance Bernstein’s liking, so he left the company to start his own fund.
In 2014 she founded Ark Invest, her own fund manager dedicated to investing in disruptive companies with the potential, she says, to change the world. The name “Ark” refers to the “Ark of the Covenant” from the Judeo-Christian mythology, it is also the acronym for “Active Research Knowledge”.
Thus, in October 2014, Ark Invest launched its first four thematic ETF ‘s that actively invest in technology innovation companies, genomic revolution, next generation internet and autonomous technology and robotics.
Although it may seem contrary to its investment philosophy, Wood also manages two index funds, but with essentially the same orientation as the rest of its funds, these are a 3D printing ETF and an Israel tech innovation ETF.
Ark Invests most recent bets are an ETF dedicated to fintech technologies in 2019 and, in 2021, a space exploration ETF. The result of this investment strategy resulted during the global health crisis, Ark’s flagship product, delivering gains of 152%, and managing over $17 billion.
Wood’s investment style: looking to the future
Now that she is independent, Cathie Wood has imposed her vision of investing in disruptive, growth companies that will shape the future. In addition, these companies must have a growth forecast of double their value over a period of no more than 5 years.
Wood has been in favor of everything that is shaping the future today, she is enthusiastic about cryptocurrencies, artificial intelligence, renewable energies, the human genome, robotics, 3D printing and even space exploration.
She herself has said that while today her investment style seems risky, in essence it is not very different from the style of, for example, Warren Buffett, only that he focuses on looking for companies that today are considered to be of value, and she looks for companies that tomorrow will be the companies of value.
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