Ark Invest's Catherine Wood On Leveraging Disruption, Innovation To Grow Portfolios

Catherine Wood, CEO of ARK Invest, discussed her embrace of disruptive technologies in today’s narrative-driven economy with Benzinga. 

Wood was a keynote speaker at Forbes’ 30 Under 30 Summit in Detroit last week, where she discussed the importance of value-driven investment.

Benzinga: How did you become so involved in tech and innovation?

Wood: When I got into Jennison Associates, they had a tech bias.

Sig Segalas — the founder — cut his teeth in terms of being an analyst on tech. He knew Mr. Hewlett and Mr. Packard. He knew Gordon Moore — Moore’s Law — he knew all of them. The DNA was there.

However, I was going to leave because I thought, ‘I’m not going to go anywhere here, I want to manage money.’ I didn’t see growth.

Sig said, ‘you can grow here. I’m not going to spoon feed you ideas. If you find some stocks, then [go ahead].’

So, I was like a little dog under the table, looking for scraps.

BZ: So, what happened next?

Wood: The internet. Wireless, Vodafone — nobody wanted that. It was a foreign stock. I knew all about CDMA, TDMA; I was a nerd.

BZ: When did you part ways with Jennison Associates?

Wood: I left in 1998 to found a hedge fund with one of my colleagues from Jennison. We started out with her family’s fortune and tripled their money. As we were moving into 1999, we were buying way out-of-the-money puts. That really paid off.

BZ: You’re pretty involved in the DNA sequencing space. Can you talk about that?

Wood: Domain Expertise. So, Manisha Samy spent eight years at Stanford University’s biology research labs. She has experimented with CRISPR technology. She followed one of her Stanford professors to Memorial Sloan Kettering. She’s volunteering there now using all the sequencing technologies, talking to all the researchers.

Our other genomics analyst was fresh out of John Hopkins biochemical engineering.

BZ: You’re bullish on Bitcoin?

Wood: Right now, it's about $160 billion in network value. That's just Bitcoin.

[If] we figured out that there is a 5% chance of confiscation of wealth [for millionaires] and took out an insurance policy saying, 'I'll put 5% of my net worth in Bitcoin," just that use case would take it to $2.3 trillion in market cap.

In Africa, if you look at the actual transactions that took place last year on the Bitcoin blockchain — not trading, there's no trading, this is actual transactions — it was $1.1 trillion dollars.

The average transaction size was $15,000; that's business-to-business in places like Africa, where cross-border trading is prohibitively expensive.

BZ: How do you respond to negativity on social media and in the markets?

Wood: When there's so many naysayers, when people aren't even paying attention and are insulting, it's usually a very good time to buy.

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