Notes and Trends: Billions come and billions go, even for the redoubtable Cathie Wood
- February 1, 2023: Vol. 10, Number 2

Notes and Trends: Billions come and billions go, even for the redoubtable Cathie Wood

by Mike Consol

It was just a couple of years ago that Cathie Wood was being hailed by some as the world’s greatest investor. Her actively managed disruptive technology ETFs were producing astounding returns of 100 percent or more, boosted enormously by large positions in Tesla and Zoom. Billions in investor dollars flooded her ETFs in hopes that past performance would be evidence of future returns. That was then. Now, her firm, ARK Investment Management has lost almost $50 billion in assets since its 2021 peak. Total assets across ARK’s nine ETFs have slumped to $11.4 billion from a peak of $60.3 billion in February 2021, according to Morningstar data. This was led by steep declines in its flagship ARK Disruptive Innovation ETF, which lost around two-thirds of its value in 2022. Wood remains characteristically optimistic and looking toward the long term: “The companies in which we invest are sacrificing short-term profits to capitalize on the exponential growth and highly profitable opportunities that a number of innovation platforms are creating. The long-term profitability and equity performance of so-called profitless tech companies will dwarf those of companies that have catered to short-term-oriented shareholders with share repurchases and dividends, at the expense of investing in the future.” (Financial Times) /// There is a renewable energy source available 24/7/365 regardless of climatic conditions or time of day. Namely, geothermal. Unfortunately, geothermal hotspots are few and far between. Then again, in theory, geothermal energy is accessible just about anywhere, provided you drill deeply enough into the earth’s heated crust. With that concept in mind, along comes an energy startup named Quaise that is working on a drilling technology that can vaporize granite with a highly concentrated beam of radio-frequency power. If such a technology became widely available, deep drilling would be commonplace and geothermal energy would be accessible on just about any patch of land. It would be as though humankind conceived of a magic wand that makes any square mile as energy-rich as an oil-gushing stretch of Texas or Saudi Arabia. (The Atlantic) /// Hush Trips are taking over the workforce in 2023, the new term where workers are secretly traveling without telling employers but continue to work. TikTok and Instagram videos of workers making videos on vacation while working are trending. (Culture Partners, Grand Welcome) /// Florida is the most Googled state for vacationing, receiving more than 150,000 Google searches a month. Hawaii and California take second and third, respectively. ( /// Christie’s sold a record $8.4 billion in art, up 17 percent from the year before, spurred by big estates — including the auctioning of Paul Allen’s $1.6 billion trove — and young bidders. Millennials won nearly one-third of luxury and contemporary lots offered in 2022. The auction house reported its earnings days after rival Sotheby’s announced it sold $7.7 billion in art during 2022, down 7 percent from the year before. The world’s top auction houses are jockeying for the chance to resell blue-chip collections amassed by baby boomers, while also courting younger buyers who want watches, handbags and contemporary artists of their own generation. (Wall Street Journal) /// A new report shows even affluent investors (those with $100,000 or more in investable assets) are feeling the strains of inflation. Just four in 10 rate their current financial situation as “very good” or “excellent,” down from six in 10 in 2021. Inflation proved the most immediate financial concern among the group (62 percent), followed by market volatility (39 percent), compared with 44 percent and 33 percent, respectively, during the 2021 survey. (Cogent Syndicated, Escalent) /// Did you know that billionaires consider investments in smart agriculture, clean water and poverty alleviation as their greatest opportunities to make an impact? That is one of the insights from a UBS survey of its billionaire clients. /// China’s massive investment in industrial robotics has put the country in the top ranking of robot density, surpassing the United States for the first time. The number of operational industrial robots relative to the number of workers hit 322 units per 10,000 employees in the manufacturing industry. Today, China ranks in fifth place among the most automated manufacturing nations. The world´s top five most automated countries in manufacturing 2021 are: South Korea, Singapore, Japan, Germany and China. (International Federation of Robotics) /// Microsoft is reportedly eyeing a $10 billion investment in up-and-coming artificial intelligence (AI) developer OpenAI. Microsoft has already funded the startup to the tune of nearly $1 billion, but the rising popularity of OpenAI’s software have prompted Microsoft and several venture funds to partake in a new tender offering that could double OpenAI’s valuation to $29 billion. Reports suggest Microsoft is already testing out an OpenAI product’s functionality within its Office suite. (McAlinden Research Partners)


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