A highlight from An Interview With Cathie Wood on Bitcoin, Tesla and Innovation Investing
Big picture power shifts remaking our world viz episode of the breakdowns originally aired on the ninth of october twenty twenty. What's going on guys today. I am so excited to share with you. Our conversation with kathy worth many of you will be familiar with kathy but for those who are not she is the chief executive officer and the chief investment officer for arc invest in a recent cover story forbes called cathy would the newest superstar investor saying that she had quote leveraged a zealous belief in innovation into a twenty nine billion in assets firm and a two hundred and fifty million dollar net worth in case. You need some more statistics. Arc's flagship eight point. Six billion dollar arc. Innovation fund is up seventy five percent and twenty twenty and is returned an annual average of thirty six percent over the last five years which is nearly triple that of the s. and p. five hundred arc is an asset management firm focus solely on innovation investing in areas from genomics to crypto currency. To a thomas vehicles. There perhaps best known in the last couple years for their at times highly controversial and always high conviction bet on tesla but they were also one of the earliest in fact maybe the earliest wall street firm to offer bitcoin as an investable asset. In this conversation we talk about everything from specific domain theses to how are quirks really to how kathy sees the world changing in the year to come so without any further ado. Let's dive in our right. We are back with kathy. Would cathy thank you so much for spending some time with us. Today i'm happy to be here nathaniel. Thank you for inviting you bet. So there's so much to dig into. I'm really excited to talk about. I just gave a little bit of an introduction before this to you and your background in art. But i'd love if you could just in your own words for people who are not familiar. Describe yourself an ark really what you guys are out of the world doing right while i founded arc invest in two thousand fourteen for two reasons. The first was to focus exclusively on disruptive innovation. I felt that it was a huge unmet. Need in the market because after the tech and telecom bust and then owado nine So over those ten years and an even longer. We saw risk aversion rise in the market. And what did that mean. Event move towards indexed or passive strategies and at the same time we saw the search for innovation or getting exposure to innovation moving into the private markets and yet there were some amazing companies in the public markets and they were being neglected. Both from a research point of view were big parts of indexes. if they're in the index at all And from a valuation point of view So there was a lot of low hanging fruit we saw. We saw a companies in the private markets trading for ten or twenty or thirty times. The valuations In the in the public markets so that was the first reason And and really addressing. What i believe is the most massive misallocation of capital. That has happened. Ever this move towards indexation more than half of the ship. In stocks today in the united states is in passive Rappers like etf's and mutual funds. And so we wanted to actually become a hedge against the value traps that are populating those those indices increasingly over time. So the i run the second reason. I started arc was to evolve an open research architecture and patterning it after open saw source software no there are a lot of contributors to open source software and they are not paid directly for contributing but it they may be elevating their status in the community. They may be helping their consulting practices. They may be trying to solve a problem in their own. Businesses and so open source software is help them in the same way. I feel that there's so much innovation taking place at the same time now. I mean we've never seen anything like this and we can go into that moment that The that it's not possible for one research house to To to be able to research these ideas effectively and in fact i think research departments in our business.