'The Rewards Are Going To Be Enormous': Why Cathie Wood Isn't Worried About Unrealized Losses

Zinger Key Points
  • ARKK shares are down more than 53% from their all-time highs in February 2021.
  • "No one is doing the research we are doing," Wood emphasized. "Of that, I am sure."
'The Rewards Are Going To Be Enormous': Why Cathie Wood Isn't Worried About Unrealized Losses

Many investors and analysts doubted Ark Invest CEO Cathie Wood's early investment in Tesla Inc TSLA, but Ark didn't care what other's thought because the firm had done the research and understood the prospects of Tesla's battery technology, AI, robotics capabilities and over-the-air software updates.

"That got us to the right answer," Wood said Thursday on CNBC.

Tesla has delivered investors more than 1,500% returns over a five-year period, which Wood maintains as her investment horizon. Tesla is still the top holding in Wood's flagship fund, the ARK Innovation ETF ARKK, with an 8.65% weighting.

Ark's investment portfolios have fallen more than 50% from their highs, but Wood isn't worried. She expects all of her investments to rebound to previous highs and beyond. She remains confident in her investment theses because of the work her team puts in.

"No one is doing the research we are doing," Wood emphasized. "Of that, I am sure."

See Also: How Have Cathie Wood's Top 10 Investments Performed In The Last 6 Months?

Research Advantages: What sets Ark Invest apart from other investment firms is the organization of the company's research, she said. Ark analysts aren't divided by sector, instead, they individually focus on the 14 evolving technologies inside of the tech sector.

Over time, she expects technology costs to drop which will allow the evolving technologies to scale across multiple sectors.

What About SARK? "The idea of shorting innovation in America is ridiculous I think," Wood said. It doesn't seem like a business built on that idea will stick around over time, she added.

The main problem with the Tuttle Capital Short Innovation ETF SARK, according to Wood, is that they aren't really doing any research. 

"If they were doing research and could point us to reasons why what we have included in our portfolio is not going to participate in the new world order, then we might have a conversation about it," Wood said.

When people are so sure Ark is wrong that they're willing to set up companies or funds in order to simply short innovation, it's a sign sentiment has shifted, she emphasized: "You know investor psychology, the pendulum, has swung so far in one direction that if we're right ... then the rewards are going to be enormous."

ARKK Price Action: The ETF was down 4.51% at $69.59 Thursday afternoon.

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