You know, usually when we sit down to do one
of these deep dives into a famous investor, the
narrative is it's pretty straightforward. It
is. It's usually a victory lap. A total victory
lap. We talk about the Warren Buffetts, the Charlie
Mungers, the, you know, the sages of the industry
who seem to have this mystical, unbreakable crystal
ball. Right. They're universally revered. Everyone
agrees they're geniuses. Exactly. The steady
hands, the ones who preach value and patience
and compounding. It's a comfortable story. It's
very comfortable. But today, today we are looking
at a figure who makes people feel anything but
comfortable. I mean, she is perhaps the most
polarizing figure in a modern finance. That's
not an exaggeration. Not at all. On one side
of the room, you have people who have called
her the absolute best stock picker of her generation.
A true visionary. And on the other side of the
room, sometimes in the very same room, just a
year later, you have people labeling her a massive
wealth destroyer. We are talking, of course,
about Cathie Wood, the CEO and CIO of ARK Invest.
And I have to be honest with you, as I was going
through this stack of research, the biographies,
the fund reports leading up to late 2025, the
trade logs, my head was spinning a little bit.
I can imagine. Because the data is so contradictory.
I mean. How is it possible for one person to
be hailed as a genius in 2020 and then, just
a few years later, be accused of incinerating...
billions of dollars in shareholder value. That
is the central contradiction we have to wrestle
with today. And I think if you look closely at
the sources, you realize that the story of Cathie
Wood isn't really about stock picking in the
traditional sense. What do you mean? It's not
about PE ratios or balance sheets? Not really.
I mean, not primarily. It is a story about extreme
conviction. It is about what happens when. profound
faith, and I mean that literally, we'll get into
that, collides with high -risk technology and
the brutal, unforgiving volatility of the financial
markets. It really is a roller coaster. That's
actually a term that pops up constantly in the
commentary about our friends. A roller coaster
ride. It's the only metaphor that fits. So here
is our mission for this deep dive. We're going
to try to move past the headlines and the memes.
And we have to say this up front. We aren't here
to give investment advice. Please do not take
this as financial advice. But we want to understand
the mindset. We want to try and get inside the
head of a woman who bets billions on a version
of the future when almost everyone else is obsessing
over the present. And to do that, we have to
look at her through a specific lens. I don't
think you can judge her as a traditional fund
manager. It just doesn't work. You have to view
her as a thematic thinker. Someone who sees patterns
where others see chaos. Exactly. Someone who
claims to see the new world emerging while the
rest of us are just... you know, staring at the
noise of the daily stock ticker. OK, let's unpack
this. Yeah. If we want to understand where she
thinks the world is going, we have to understand
where she came from. And this was the first surprise
for me in the research. Oh, yeah. I kind of assumed,
given her status, that she was born on Wall Street,
you know, Upper East Side, banking family, the
whole nine yards. Far from it. She starts out
in Los Angeles, born in 1955. Right. The eldest
child of Irish immigrants, Gerald and Mary Deddy.
And there's a specific detail about her father
that just jumped out at me. I feel like this
is the rosebud of the Cathie Wood story. I know
exactly what you're going to say. The radar systems
engineer. Yes. Her father served in the Irish
Army and then the U .S. Air Force as a radar
systems engineer. It's a detail that seems small,
but if you zoom out, it is incredibly significant.
I mean, think about what a radar system actually
does. What is its fundamental function? Well,
it detects things you can't see. Planes, missiles.
storms on the horizon. Exactly. But specifically,
it detects things that are invisible to the naked
eye. It scans the horizon for these little blips
that represent something coming, something that
is going to arrive but hasn't arrived yet. And
the radar operator has to trust the instrument
more than they trust their own eyes. That's the
key. You have to have faith in the system, in
the technology, over your immediate sensory input.
That is a fascinating connection. So you're saying
she grew up in a household where the primary
mode of thinking was about seeing the invisible.
about detecting the future before it becomes
obvious. I think it shaped her entire cognitive
framework. I really do. She isn't looking at
what a company is earning today that's visible.
That's what everyone else sees. She is trying
to use her own internal radar to detect where
that company and the entire world will be in
5, 10, or 20 years. She is looking for the blips
on the screen. That makes a lot of sense. It
explains why she seems so detached from current...
market conditions sometimes. You know, when her
fund is down 50 percent and she's on TV saying
she's more confident than ever. Right. Because
in her mind, the daily price is just static.
It's noise. The blip on the long range radar
is the signal she cares about. So she's in L
.A. She goes to Notre Dame Academy, which is
an all girls Catholic high school. We should
probably bookmark that detail about her faith.
It comes up again later. In a big way. And then
she heads to the University of Southern California,
USC. And she doesn't just scrape by. She graduates
summa cum laude in finance and economics in 1981.
Top of her class. Clearly brilliant. But here's
where it gets really interesting. Because in
academia, you often have that one professor.
who just changes your entire trajectory. We have
to talk about her mentor. The Laffer curve guy.
I mean, for anyone who took Econ 101, that's
a name that rings a bell. The very same. And
for listeners who might not be deep into economic
theory, we should probably clarify why Arthur
Laffer is such a big deal. He is essentially
the godfather of supply -side economics. Right.
This is the stuff that underpinned Reaganomics
in the 80s. Exactly. In the 1970s, the dominant
economic theory was Keynesianism. Which, to oversimplify,
is the idea that government should manage the
economy through spending and managing demand.
The government is the driver. Right. Laffer flipped
that completely on its head. He argued that you
should focus on supply, you cut taxes, you deregulate,
and you unleash production and innovation from
the private sector. The famous Laffer curve argues
that if you cut tax rates from a very high level,
you can actually increase total tax revenue by
supercharging the economy. Right. Because more
people are working, more companies are investing,
the pie gets bigger for everyone. So he's all
about small government, low taxes and letting
the free market run wild. So Cathie Wood is learning
at the feet of this. This economic rebel, really.
Absolutely. And he wasn't just her professor.
He was her mentor. The sources say he took her
under his wing. He actually helped her get her
first job at Capital Group in 1977, even before
she graduated. Wow. So this establishes her intellectual
lineage. She isn't coming from a background of
cautious government managed Keynesian economics.
She's coming from the school of aggressive free
market supply side thinking from day one. That
contrarian streak we see later starts right here.
She believes that innovation solves problems,
not regulation. And she believes that the market
left to its own devices will always find the
most efficient path. That is a core tenet of
her philosophy that has never, ever changed.
So Lafferty gets her in the door at Capital Group.
She cuts her teeth there as an assistant economist.
Then in 1980, she makes the big move. She goes
to New York City. The center of the universe.
For finance, anyway. She joins Jenison Associates.
And she stays there for 18 years. I mean, that
is a lifetime in Wall Street years. It is. She
wasn't job hopping. She settled in and wore a
lot of hats there. Chief economist, analyst,
portfolio manager. She really learned the business
inside out. But there is one specific moment
from her time at Jenison that I think defines
her entire career. It's the moment she proved
her radar actually worked. The debate with Henry
Kaufman? Yes. This is a legendary story in financial
circles, to give you the context. It's the early
1980s. Inflation is rampant. Interest rates are
through the roof. It's the era of stagflation.
A terrible time for the economy. And Henry Kaufman,
who's the chief economist at Salomon Brothers,
was known as Dr. Doom. Great nickname. And he
had earned it. He was a heavyweight. A giant.
And his view, which was the consensus view of
almost everyone on Wall Street, was that interest
rates and inflation were going to keep skyrocketing.
the sky was falling essentially it was the only
story in town buy gold hide under your desk and
here comes kathy wood who is what in her late
20s at this point very young relatively unknown
she looks at the data specifically the money
supply data she learned to analyze under laffer
and she sees something different she sees a blip
on the radar that dr doom is missing What did
she see? She argued that interest rates had actually
peaked and were about to collapse, that the back
of inflation had been broken. Which was a completely
insane thing to say at the time. It takes some
serious nerve. She's young. She's a woman in
a very, very male -dominated industry. And she's
standing up in meetings and telling the most
respected economist in the world that he's wrong.
Publicly. She was writing reports on this. And
she was right. She nailed it completely. Paul
Volcker's Fed had done its job. Interest rates
came crashing down. The market centered one of
the biggest bull runs in history. Imagine what
that does to your psychology. I mean, really
think about that formative experience. You go
against the titan, you go against the entire
crowd, you trust your own niche data, and you
win decisively. It cements a belief that the
consensus is often wrong. It validates the idea
that if you do the work and trust your data,
you can beat the market. But, and this raises
an important question, does being right once...
even in a huge way, mean you're always right.
That's the danger. Because that confidence, that
willingness to stand alone against the crowd
is a double -edged sword. It's your greatest
strength and potentially your greatest weakness.
We definitely see that edge getting sharper later
on. It's almost like that victory set the template
for her entire career. I see what you don't.
You're all looking at the wrong thing. Exactly.
So fast forward a bit. It's 2001. After 18 years
of jenison, she moves to Alliance Bernstein.
This is the big leagues. A huge, established,
traditional asset manager. And she's the chief
investment officer of Global Thematic Strategies,
managing $5 billion. But then 2008 happens. The
great financial crisis. And this is where we
have to talk about the downsides of her strategy.
This is where the cracks in the thematic approach
start to show. The sources say she was heavily
criticized for underperforming the market during
the crisis. And we have to explain why she underperformed,
because it's not random. It comes down to a concept
called beta. OK, let's define that for the listener,
because it's key to understanding her entire
story. What is high beta? Beta is essentially
a measure of a stock's volatility relative to
the overall market. The market, like the S &P
500, has a beta of 1. So it's the baseline. It's
the baseline. If your stock has a beta of 2,
it means that in theory, if the market goes up
1%, your stock goes up 2%. But, and this is the
important part, it works both ways. So if the
market drops 1%, your high beta stock might drop
2 % or more. Exactly. Cathie Wood's strategies
are historically very high beta. She invests
in growth in the future in unproven tech companies
that are often not profitable yet. They are more
sensitive to market mood swings. Extremely sensitive.
So when the market is happy and confident, what
they call a risk -on environment, she's ecstatic.
Her portfolio soars. But when the market is sad...
Or terrified, like in 2008... She is devastated.
In a liquidity crisis like 2008, investors are
scrambling for safety. They don't want future
promises. They want cash. They want companies
that make toothpaste and toilet paper things
people buy no matter what. The boring stuff.
The boring, profitable, low beta stuff. They
dump the innovation stocks first and fastest.
So her portfolio didn't just fall with the market.
It crashed much harder. Exactly. And because
her strategy is fully invested in these themes,
she doesn't have a safety switch. She doesn't
pivot to safe stocks. She believes in her theme,
so she rides the volatility all the way down.
It seems like that experience didn't scare her
off, though. If anything, it seems to have made
her double down on her conviction. It's like
the Henry Kaufman experience taught her to trust
her debt, and the 2008 experience taught her
to endure the pain when her gut feeling is out
of favor. Which brings us to 2014. She's been
at Alliance Bernstein for over a decade, and
she has this new idea, a big idea. She wants
to create actively managed ETFs based entirely
on disruptive innovation. Let's break that down.
Yeah. ETFs, exchange -traded funds, were mostly
passive at the time. They just tracked an index
like the S &P 500. Right. Cheap, boring, and
automatic. She wanted to combine the accessibility
of an ETF, something anyone can buy and sell
like a stock, with her high conviction active
stock picking. She says, I want to package these
high risk, high reward ideas into an ETF that
anyone can buy. And she pitches this to the higher
ups at Alliance Bernstein. And they said, no,
thanks. They deemed it too risky. And honestly,
looking at it from the perspective of a traditional
conservative firm managing pension money, you
can see why. I guess so. Active ETFs were a relatively
new concept. And betting purely on the most volatile
sectors of the market is inherently unpredictable.
They didn't want the headache or the potential
liability if it blew up. But Cathie Wood doesn't
take no for an answer. And I love this part of
the story because she's 57 years old at this
point. An age when most people are planning their
exit strategy. Right. Most people at 57 are thinking
about their 401K vesting and where they're going
to retire. She decides to quit her stable, high
-paying job as a CIO and start her own firm from
scratch. That takes guts. You can't deny that.
It requires a massive, almost staggering amount
of self -belief. And she calls it ARK Invest.
Now, for the longest time, I assumed ARK was
an acronym, like Advanced Research Knowledge
or something. A lot of people think that. Automated
Risk Keeper, I've heard that one, but it's not.
It's named after the Ark of the Covenant. The
biblical Ark, the one from Indiana Jones. Exactly.
The sources know she was reading the one -year
Bible at the time of founding, and as she was
praying and thinking about a name, the Ark of
the Covenant just stood out to her. And this
reveals something absolutely essential about
her character, the deep integration of her personal,
devout Christian faith with her professional
ambition. She isn't just managing money. She
views her work through a spiritual lens. It's
so interesting because usually Wall Street is
all about cold, hard rationality, you know, atheistic
numbers. But for her, there's this element of,
is it destiny? Is it a calling? I think conviction
is the word we keep coming back to. If you believe
you're doing something that aligns with a higher
truth. or in her case, allocating capital to
disruptive innovation, which she believes makes
the world a better place, as God intended, you
are going to hold on to your positions even when
the market is screaming at you to sell. It provides
a kind of psychological armor against the critics
and the downturn. Exactly. If you think your
mission is righteous, a 20 % drop in a stock
price isn't a signal that you're wrong. It's
just a test of faith. It's the market offering
you a chance to buy more of what you believe
in at a discount. Speaking of armor, and maybe
a few chinks in it, We have to talk about who
helped fund this launch because launching a fund,
let alone a whole family of them, is incredibly
expensive. You need seed money. Ah, yes, the
seed money. This is a complicated part of the
story. The name that comes up is Bill Wang. A
name that sends shivers down the spine of risk
managers everywhere now. He was the man behind
Archegos Capital. Which, for listeners who don't
remember, famously imploded in March of 2021.
It didn't just implode, it vanished. It lost
an estimated $20 billion in two days in one of
the biggest, fastest -treating disasters in modern
history. But this was back in 2014, before all
that. Right. Back then, he was known as a tiger
cub, a protege of the legendary hedge fund manager
Julian Robertson. He was known as an aggressive,
high -risk investor who was also, like Cathie
Wood, deeply religious so they connected on that
level they did he understood her vision he shared
her faith and he had the capital he provided
the seed money for ark's first four etfs it feels
like risk attracts risk you have this high conviction
high volatility strategy And it attracts high
risk capital. It does. It shows the circle she
was operating in. Bill Hong was known for using
extreme leverage and making incredibly concentrated,
aggressive bets. It's not a coincidence that
this was the type of capital attracted to her
vision. It kind of set the DNA for the firm right
from the start. Aggressive, high conviction,
high stakes. So ARK launches in 2014. And for
a while, it's a grind. They aren't an overnight
success. They're out there publishing research,
trying to get noticed. For the first few years,
they were a niche player. Interesting, but not
exactly setting the world on fire. But then the
rocket ship takes off. The years 2017 to 2020.
This is the golden era for Cathie Wood. The narrative
starts to build. Especially 2020. I mean, we
all live through it. But looking back at the
financial charts from that year, it is just mind
boggling. Her flagship fund, ARKK, the Error
Innovation ETF, was the top performing global
equity fund with over a billion dollars in assets.
Bloomberg named her the best stock picker of
2020. And CNBC noted ARKK had a 170 percent return
in just that one year. Let that sink in. One
hundred and seventy percent. That's just it's
absurd. If you put ten thousand dollars in ARKK
at the start of 2020, you had twenty seven thousand
dollars by Christmas. That is lottery ticket
money. It is. And we have to ask why. Why did
2020 happen the way it did for her? It wasn't
just luck. It was the pandemic, right? It was
the ultimate catalyst for her themes. It was
the perfect storm. Think about what she was invalid
in. Digital payments with Square, streaming with
Roku, telemedicine with Teladoc, video conferencing
with Zoom, genetic sequencing, electric vehicles
with Tesla. All the things that became essential
when the world shut down. Exactly. The entire
global economy was forced to accelerate into
the very future she had been predicting for years.
The five -year horizon she always talks about
arrived in five weeks. Her radar was perfectly
tuned to that specific disaster. She was the
queen of Wall Street. An absolute rock star.
Everyone wanted to know what Kathy was buying.
She had her own merchandise. People were unironically
wearing In Kathy We Trust t -shirts. And she
was so open, right? She was democratizing the
information, sharing her research freely online.
It created this huge cult -like following, especially
among younger retail investors. She was appearing
on every podcast, every news show. She became
this icon of futuristic, optimistic investing
in a very dark time. But... And there is always
a but in these stories. Trees do not grow to
the sky. Right. And 170 % return is not sustainable.
No, it is not. And when the environment changed,
it changed violently. The brutal comedown. 2021
hits, vaccines roll out, the world starts to
reopen and the music stops. Well, a different
kind of music starts playing. Inflation starts
creeping up as supply chains are broken. And
what does the Federal Reserve do to fight inflation?
They raise interest rates. They raise interest
rates aggressively. The very thing she had famously
predicted would stay low back in the 80s started
to rise. And remind us again, why do high rates
hurt her specific type of stock so badly? It
all comes down to a concept called discounted
cash flow. It's how you value a company. If you
are a company like Coca -Cola, you make a predictable
amount of money today. Higher interest rates
matter, but your value is anchored in the present.
But if you are a tech company promising to make
billions of dollars 10 years from now, those
future dollars are worth a lot less today when
interest rates are 5 % than when they are 0%.
It's a pure math problem. So as rates go up,
the present value of her portfolio's future promises
goes down. The whole foundation of their valuations
gets kicked out from under them and her stocks
get repriced downwards viciously. ARKK falls
24 percent in 2021, which is not great. But after
170 percent gain, maybe it's just a correction.
But then 2022, the bottom falls out completely.
In the first quarter of 2022, ARKK was the worst
performer among all the equity funds covered
by the research firm Morningstar. She went from
best to worst in a little over a year. And then
comes the label that sticks. Morningstar, who
are usually pretty polite, you know, very bureaucratic
with their analysis. They came out with a report
in February 2024 and they didn't mince words.
They called ARK Invest the wealth destroyer.
Specifically, they ranked ARK Invest funds as
the worst wealth destroyer family of funds for
the entire decade ending in 2023. That is a brutal
headline. Let's look at the specific stat here
because it's staggering. Morningstar estimated
a loss of $7 .1 billion in shareholder value.
Seven point. one billion dollars gone but wait
i need you to explain this to me because this
is the part that confused me at first looking
at the data the notes also say that for the 10
years ending in 2023 the ark fund itself generated
a total return of 122 percent that's also true
so if the fund is up 122 percent over its life
how on earth can it have lost 7 .1 billion dollars
for its investors The math doesn't seem to man
thought. It's a classic tragic case of the difference
between time -weighted returns and dollar -weighted
returns. And this is maybe the most important
lesson from the entire Cathie Wood saga. Okay,
let's break that down for everyone listening.
Okay, time -weighted return is what you see on
the fund chart. It shows the fund's performance
over time. If you put money in on day one and
never touched it, you are up 122%. Simple. That's
the theoretical return. It's the theoretical
return. But dollar -weighted return is different.
It looks at when the actual... Dollars, the real
money from real people, entered and left the
fund. It weighs the returns by the amount of
money invested at the time. Ah, I see where this
is going. The timing is everything. Everything.
In the early years, from 2014 to 2019, when the
fund was doing well, it was relatively small.
Maybe a few hundred million, then a billion dollars.
So a 50 % gain is great, but it's not a huge
dollar amount. But then 2020 happens. The fund
goes vertical. 170 % returns. It's all over CNBC.
It's all over social media. Cathie Wood, the
investing genius. The FOMO kicks in. The fear
of missing out. Massively. The average retail
investor sees the headline, sees the rocket ship
chart, and they chase the performance. Billions
and billions of dollars poured into the fund
at the absolute peak. People were buying in at
$150 a share in late 2020 and early 2021. And
then the elevator cable snapped. The fund crashed
all the way down to $30 or $40 a share. So most
of the actual money, the bulk of the capital
from the public, arrived just in time to lose
70 % of its value. So the fund itself, on paper,
made money over its lifetime. But the average
investor in the fund got crushed. It destroyed
wealth because it attracted the most capital
right before it drove off a cliff. That is a
painful reality check. It's like throwing a great
party, but everyone shows up five minutes before
the cops raid the place and gets arrested. That's
a perfect analogy. The early guests had a great
time, but most people just got the consequences.
And to add insult to injury. Let's compare ARK's
122 % 10 -year return to just buying a simple
tech index fund. The NASDAQ 100 index, which
holds all the big tech stocks, over that same
10 -year period where ARKK returned 122 % with
heart -stopping, stomach -churning volatility,
the NASDAQ returned 330%. Ouch. So you took on
massive stress, you bit your nails for a decade,
and you ended up with significantly less than
if you just bought a boring tech index fund and
gone fishing. That is the harsh truth of high
-risk active management. It is very, very hard
to beat the index over a long period, especially
after fees. So that puts the best... stock picker
of 2020 title in a pretty harsh light. It shows
that one year of performance means almost nothing
in the long run. But Cathie Wood is resilient.
I think that's undeniable. She didn't close up
shop. She didn't apologize. She kept showing
up, doing interviews and buying more of the stocks
that were falling. Doubling down on her conviction.
Let's bring this timeline up to the present day
or, well, the reason past since we are recording
this in early 2026. Right. We have data through
late 2025. And guess what? The roller coaster
went back up again. It did. After the brutal
crash, ARKK rebounded significantly in 2025.
Through the third quarter of 2025, the fund was
up 23 .4%. Which is impressive on its own, but
especially impressive when you compare it to
the broader market. The S &P 500 was only up
about 6 .8 % in that same period. So she more
than tripled the market's return. She beat the
market again. She did. And this is the maddening
thing about her strategy for her critics. When
it works, it works beautifully. When the conditions
are right. Maybe interest rates stabilized, maybe
excitement around AI or crypto surged again.
Her high beta portfolio flies. It acts like a
coiled spring. When it's released, it just explodes
upwards. Speaking of flying, there was a specific
tactical move she made in mid 2025 that caught
a lot of attention in the financial press. The
Coinbase play. Yes. This was in late June, early
July of 2025. So to set the stage, Coinbase stock
has surged. It was up 37 percent in just one
month because there's a lot of optimism about
new, clear crypto regulation coming. Right. And
usually the criticism of Kathy is that she falls
in love with her stocks and never sells. She
has diamond hands, as the internet says. She
just holds on for dear life. But here she actually
took profits. She sold about $47 .9 million worth
of Coinbase shares, roughly 137 ,000 shares.
That surprises a lot of people, it seems. Disciplined.
It's very disciplined. And what's fascinating
is the context. She sells into the strength,
taking some money off the table after a huge
run -up. But, and this is key, she didn't exit
the position. She didn't lose faith. Not at all.
Even after selling nearly $48 million worth,
Coinbase remained her second largest holding,
making up about 8 .4 % of the entire portfolio.
So she's just trimming the hedges, not cutting
down the tree. Exactly. It shows active management
and practice. She's rebalancing. She's saying,
OK, this position grew too large relative to
everything else. Let's take some chips off the
table to deploy into other ideas that haven't
popped yet. It contradicts the narrative that
she's just a blind gambler who holds until zero.
And that sector crypto is a huge part of her
identity now. I mean, we can't talk about Cathie
Wood for more than five minutes without talking
about Bitcoin. It's arguably her highest conviction
bet of all, even more than Tesla. The sources
say she is a major, major proponent of Bitcoin.
But it's not just client money she's investing,
right? This isn't just her playing with other
people's chips. No, this is the ultimate skin
in the game. As of 2024, the records show she
had allocated 25 % of her personal net worth
into Bitcoin. A quarter of her personal fortune.
That's a stunning number. I mean, most financial
advisors would tell you to put, what, maybe 1
% to 5 % in a highly speculative asset like that?
If that, most would say zero. If we connect this
to the bigger picture, it explains why she is
so immune to criticism. If you believe in something
strongly enough to bet a quarter of your own
life savings on it, a bad Morningstar report
or some mean tweets are not going to change your
mind. She doesn't just see it as a stock. She
sees Bitcoin as a monetary revolution, an insurance
policy against irresponsible central banks. It's
a fundamental part of her worldview. And that
ties into her politics, too. We promised we wouldn't
take sides and we won't. But we have to look
at how her political views shape her investing
strategy. It's impossible to separate them. She
views everything through that single lens of
disruptive innovation. So naturally, she tends
to view government regulation as the primary
enemy of progress. Right. Back in 2020, she publicly
warned that Joe Biden's tax and regulation plans
would stifle innovation. She's been very consistent
on that point. Whether it's the SEC regulating
crypto or proposals for tax hikes on capital
gains, she sees it as a roadblock to the future
she's betting on. And she's putting her money
where her mouth is in terms of education, too.
It's not just about her fund. She donated a significant
amount of money to her old high school, Notre
Dame Academy, to start the Duddy Innovation Institute.
Named after her family. Yes. And the stated goal.
is to encourage high school girls to study disruptive
innovation. She wants to create the next generation
of radar engineers, essentially. I love that.
The next generation of radar engineers. It really
does come full circle back to her dad. You know,
we've talked a lot about the money and the funds
and the theories, but I want to take a second
to look at the human side of this. She lives
in St. Petersburg, Florida now, right? She moved
the whole company. She did. She moved the entire
headquarters there from New York in 2021. Which,
again, is a classic Cathie Wood contrarian move,
leaving the center of the financial universe
to go to Florida. And she's a widow. Her husband,
Robert Wood, died in 2018. And she's a mother
of three children. It's worth pausing on that
for a moment. The year 2018, that was just before
her massive rise to fame in 2020 and then the
subsequent crash. She was navigating the loss
of her spouse while building this empire and
dealing with all that public pressure. It speaks
to a profound resilience. I mean, leading a high
-risk, high -volatility fund is one of the most
stressful jobs in the world. Doing it while grieving,
while being a single parent, it requires a specific
type of psychological fortitude. It reinforces
that idea that her faith and her deep -seated
conviction are the bedrock of her ability to
function under that kind of immense pressure.
It has to be. So let's try to pull this all together.
We've got the radar engineer's daughter, the
mentee of the supply -side guru Arthur Laffer.
The young analyst who publicly beat Henry Kaufman,
the founder who named her company after the Ark
of the Covenant, the best stock picker of 2020
and the worst wealth destroyer of the decade.
It is a dichotomy. It is a bundle of contradictions
held within one person. So I have to ask the
big question. Is she a genius or is she a gambler?
I think I think that's the wrong question. Oh,
OK. Then what's the right question? I think the
right question is, what is the role of active
conviction in a market that is increasingly dominated
by passive flows? Break that down for me. What
do you mean? Look, the way most people invest
today, the way institutions recommend you invest,
is to just buy the S &P 500. Buy the index. Accept
the market average. It's safe. It's efficient.
It works over time. Exactly. It's the sensible
path. Kathy Wood represents the old school idea,
the belief that a human being, through research
and insight and conviction, can identify the
future and dramatically outperform the average.
She's a throwback to the era of the star stock
picker. But the data we just went through shows
she has struggled to do that consistently over
the long haul, at least compared to something
like the NASDAQ index. True. But when she wins,
she wins big. She offers a product that is fundamentally
distinct. If you buy ARKK, you are not buying
the S &T 500. You are buying a ticket to a very
specific, concentrated vision of the future.
A future of robo -taxes, genomic editing, and
cryptocurrency taking over the world. Exactly.
And sometimes that vision is blurry and seems
impossible. And sometimes, like in 2020, it comes
into crystal clear focus. The radar picks up
blips. Sometimes those blips are incoming revolutions
that will change the world. Sometimes they are
just noise or glitches or false signals. And
the tragedy for investors is that they often
can't tell the difference until their money is
already committed and the missile is already
hit. That's the risk you take. So what does this
all mean for you, the listener? trying to make
sense of all this. I think it means that conviction
is a powerful drug. It can lead to massive success
like her 2020 run, but it can also blind you
to risks leading to the 2022 crash. Kathy Wood
is a living reminder that the market is a humbling
machine. Even the best can become the worst in
the blink of an eye. And perhaps it's a reminder
that if you're going to follow a visionary, if
you're going to bet on someone else's radar,
you better make sure you have the stomach for
the ride. And you absolutely need to know when
to get off the elevator. And maybe... Just maybe
learn to check your own radar every once in a
while. Don't just rely on someone else's screen.
I love that. Here is a final thought for you
to mull over as you go about your day. In a world
that is increasingly moving toward passive investing,
where we all just buy the whole haystack instead
of looking for the needle, is there still a place
for the star stock picker? Is Cathie Wood a relic
of a past era trying to use human intuition in
a market that is now ruled by cold, unfeeling
algorithms? Or here's the other side of it. Is
she the only one actually looking at the long
range horizon while the algorithms are just fighting
each other over the next few microseconds of
trading data? That is the multibillion dollar
question. Thanks for diving deep with us. See
you next time.