Mentioned in Video:

🚀 ARK Invest's ETFs are filled with amazing stocks like TSLA (Tesla stock), TDOC (Teladoc stock), SQ (Square stock), SPCE stock (Virgin Galactic), and Palantir stock (PLTR). So why are Cathie Wood's portfolios down almost 20% from recent highs? ARKX, ARK Invest's Space Exploration fund also just launched during a market where it's tough to know which stocks to buy now. Find out why I'm more bullish on ARK's picks than ever on 2021's Q1 State of the ARK!

Video Transcript:

Memo to Cathie Wood: close your fund. Close it. Listen to what the late Jack Bo, would say. Close it. Cathie, in the midst of the incredible year, ARK is having you're in a legal battle for control of your firm. How on Earth did that happen?

Kathie Wood is unfortunately probably yesterday's news already. She had a terrible February. You had her on your show on February 17. She was talking about Teladoc. Scott, you may remember this. It was at 270 a share as you were talking to her. Now it's 170. That's three weeks ago, it's down a $100 a share. You know, I love her conviction. I love her passion. But, you know, we're not going to be talking about Cathie Wood much more.

So let's talk about Cathie Wood. With the quarter coming to a close, I thought it would be a great time to do a performance review of ARK Invest as well as this channel. Let me show you why I'm more bullish than ever on both, on this quarter's State Of The Ark. By the way, you might want to grab a drink because we're about to cover a lot of stocks. If you didn't know, ARK stands for Active Research Knowledge. In terms of research and knowledge, just this week, ARK launched ARKX:

Kathie Wood's actively managed fund themed around space exploration, because their research suggests that these technologies are ready for prime time. They released their 2021 Big Ideas Report, which has a whopping 15 big ideas this year. Those are the advanced technology platforms that may disrupt the businesses we rely on today. This channel has been covering one idea a week for about two months now, which has come with some drama of its own. Yeesh. ARK Invest updated their already very bullish price target for Tesla because their research suggests that autonomous ride hailing seems more and more possible in the next five years, and we all know how that went.

But all of that drama pales in comparison to the drama around each one of ARK's funds being down over 20% from recent highs. Yeah, all of them. Since the start of the quarter, though, all of ARK's funds have been trading roughly sideways plus or -5% except ARKQ, which is still up almost 13% as of the end of March. But since Cathie's ETFs are baskets of stocks, it's easy to treat them like stocks and get upset when your investment stays in the red week after week.

But these funds are not stocks and now is actually the most exciting time to be holding them. So let's take a break from the research and the knowledge and focus on the A in ARK Invest, the active trading that happens within these ETFs. Here's what I'm talking about.

All I'm doing is concentrating on investing. If you look at our trades every day, we are being so opportunistic out there during a volatile market, we trade around volatility. We are liquidity providers. When investors and speculators are selling our stocks, creaming them our highest conviction stocks. We will be buying them. When they are hyperventilating about our stocks, we will be selling them. We will be taking profits because we know there will be another source of controversy. We'll get another bout of Volatility and we can train around it.

That was Cathie Wood on Episode nine of Benzinga's Raz Report, which was recorded on March 3rd. Well, after all of the ARK funds started to drop, she's talking about actively trading stocks around volatility. We all get that. What I think most people don't get is just how much this act of trading contributes to ARK Invest's overall performance.

Let me give you just a couple of steps. Just Tesla alone. In 2018 Tesla alone, just our trading, not the performance of the stock, which, by the way, in a down year 2018 the market was down three and a half percent. Tesla was up 6%. But take that performance away. Our trading activity alone contributed 175 basis points to performance. Just Tesla, just Tesla and we trade all of our names. 2019. Just Tesla's trading around. Our trading around added 320 basis points to our performance.

So in 2018, 2% of all of ARK Invest's gains came from just trading Tesla, not Tesla itself, the trading of this one stock. In 2019, that number was more than 3% just from the trading of Tesla. ARK Invest actively trades all of its stocks this way. So let's dive into the data and I'll show you just how much Cathie Wood is Loading the boat, or should I say ARK, around this most recent rotation out of growth stocks and into value stocks. Then you'll see why I'm so bullish.

Let's look at the funds today versus at the start of the quarter. ARKK grew by 19% from $18 billion to just over $21 billion today. ARKG grew by 16% from just under $8 billion to nine. ARKW grew by just over 26%. ARKF, ARK Invest's fund themed around financial technologies or Fintech doubled in assets under management. And ARKQ grew by just under 90% as well. I guess Fintech has replaced Genomics as the new hotness. By the way, this whole presentation is available for download in the description below.

So if you enjoy this type of content, the free downloads, and my relentless coverage of ARK Invest's research, you can invest in the channel that invests in you by liking this video and subscribing. In total, ARK Invest's funds grew by over 25% this quarter. It's important to look at assets under management because when we look at how individual holding sizes have changed, we need to account for this insane amount of growth. Here's a table of ARK Invest's Top 20 holdings. When you combine all six of their actively managed ETFs, each row is one stock, and the rows are colored by how much that position grew relative to their overall funds.

The more green the row, the more that position grew in terms of percent shares relative to ARK's overall growth. The more red, the more that position shrank relative to that same growth. So for example, you can see that Intercontinental Exchange, ticker symbol ICE is tan colored because it grew just under 27%, which was ARK's average growth. The table is sorted by how much money ARK has in that stock today. With over three $2 billion in it, Tesla is ARK Invest's biggest position, so it's in the top row of this table.

Now, look at this. Tesla's price is 16% lower than it was at the start of the quarter, but the combined funds are holding 41% more shares. Think about what that means if you believe in Tesla's longterm vision. Teladoc is ARK Invest's second biggest position, a $2.2 billion position. Remember that guy from the beginning talking about how it's down over $100 per share? Well, Cathie noticed that too. Guess what she's doing about it? She's loading the boat. Teladoc is only down about 15% from the start of the quarter, while ARK Invest's position in it has increased by almost 80%. Eight zero.

When I saw ARK Invest starting to make these outsized buys in Teladoc, I did two things. I made a video about my research on Teladoc on Ticker Symbol Live, which is my channel focusing on the individual stocks that ARK Invest's in.

Today we'll be talking about Teladoc. ARK Invest's number two position overall. And don't let the size of this bar fool you. If you take away ARKK, they actually have almost as much money invested in Teladoc as a pure play company as they do in Tesla. ARK Invest's confidence in Teladoc as a stock is massive.

And then based on the due diligence I shared in that video, I went out and I bought the stock because I believe in Teladoc's vision. So, full disclosure, I now own a lot of Teladoc. And coming back to ARK Invest's top 20 holdings, they now own a lot more. Shopify, ticker symbol SHOP, Baidu (BIDU), Zoom (ZM), Unity Software, ticker symbol U – I didn't plan that. And Novartis, ticker symbol NVS. In all of these cases, you can see that these big increases in share accounts came with double digit increases to ARK rank.

For example, Shopify was ARK Invest's 20th biggest position at the start of the quarter and has since moved up 14 ranks, making it their 6th biggest position overall today. Baidu was their 22nd biggest position and is now their 8th biggest position. And so on. Here's a heat map showing all of ARK Invest's positions colored the same way. While your eyes adjust, let me explain what the heck you're looking at. The green squares are the ones with the biggest increases in share count. ARK Invest's shares in Skillz, ticker symbol SKLZ, has increased by almost 2700 percent over the quarter.

Palantir, ticker symbol PLTR, has seen its position increase by over 1200%, and it's now ARK Invest's 32nd largest holding overall. Look at all these green squares. Each one of these is Cathie Wood loading up on stocks for bargain basement prices. While others are rotating money into value stocks, Cathie is doubling and tripling down on stocks she thinks will grow exponentially. To make these huge purchases, ARK Invest has to sell stocks, which are the ones colored in red. They sell for a variety of reasons. Sometimes it's a change in conviction.

Sometimes it's because the stock is one of their cash-like positions, and sometimes it's because it's Tesla and ARK Invest tries to hold no more than ten-ish percent of a fund in any one stock. But that might also be changing. In any case, the point of ARK selling something is almost always the same. It's because Cathie Wood thinks that money is better used elsewhere. The green squares are those elsewheres. So, why does she feel that way? And how does she go about making these decisions?

That's where the R and the K, research and knowledge, come back into the picture. ARK Invest spends a lot of time building a coherent five-year vision of the future and researching the technology platforms driving that vision. If I don't agree with a piece of the vision then I simply don't invest in it. This isn't an all or nothing dinner. It's a buffet. Wait, do people still go to those? In my opinion, the funds Cathie Wood manages map onto these big ideas like this. In the downloadable version of the presentation, I provide another mapping that's a little more specific, but this one definitely does the job.

The important thing to understand here is that the research happens first. So when stocks dip, not if, but when, Cathie's list is ready and ARK Invest is already confident in it. That's why this channel focuses on research, so we can build that confidence for ourselves. So, let's tie the stocks that Cathie Wood is aggressively trading inside her funds back to the research that makes ARK Invest so confident. Stocks that focus on artificial intelligence, big data analytics, and digital experiences sit inside ARKW, ARK Invest's fund themed around the next generation of Internet applications, this fund is filled with online services that most people have at least tried.

Shopify, Spotify, Twitter, Zillow, Zoom, Netflix, DocuSign, and Nintendo all sit inside ARKW. These are all digitally native companies that take something that's annoying to do in the physical world, renting a movie, paying a vendor, signing and returning a document, communicating with your friends, (ew) and bringing that activity online. Then they use artificial intelligence and the mountains of data they get to optimize that experience for each user based on the data they have on that user and users like them. Here's a look at what was inside the fund at the start of the quarter on the left and at the end of the quarter on the right.

Note that there are two scales here. There's percent weight for each stock inside ARKW at the top and there's the actual dollar amount on the bottom. Tesla is in the top with over 10% weight in both cases. Using the scale at the bottom, ARKW

has about $550 million in Tesla at the start of the quarter and now has over $700 million in it. Roku was the number two holding in ARKW at the start of the quarter and now is GBTC, the Grayscale Bitcoin Trust, and you can go down and down the list.

The whole fund increased in size by about 26%, so this table is colored so that the positions that grew within this fund by more than 26% are in green and those that grew less are in red. The table is sorted with the stocks change in position in ARKW from the start of the quarter until now. So for example, Agora Inc's position in ARKW moved from 36 to 26 even though it grew by only 21% where the fund grew by 26%. That means Cathie Wood decided to put more money elsewhere instead of growing Agora Inc at the same rate as the fund. That elsewhere is probably some combination of Palentir, ticker symbol PLTR, Skillz (SKLZ), Baidu (BIDU) and the other super green rows on this list.

So if you like the idea behind this fund and are confident in the technologies and innovations behind them, those super green rows might be a great start. That's it. That's the whole loop from vision of the future to the technologies enabling it to the companies leveraging those technologies to the fund manager publishing her trades among those companies based on her and her firms research. Now that we've gone through a full loop, we can pick up the pace for the remaining funds. Timestamps are enabled on the timeline below

if you're looking for a certain fund in particular. ARKF is all about digitizing and disintermediating financial transactions and the hardware and infrastructure that supports that. Think peer to peer lending, digital wallets, contactless mobile payments, and using artificial intelligence to do things like calculate risk, interest rates, insurance premiums, and so on. It's also filled with companies like Zillow, Intercontinental Exchange, Opendoor and Teladoc. These companies focus on providing professional services: medical consulting, real estate loans, opening and managing a business, but without all of the friction that comes with the physical process of doing so.

If I could describe ARKF in just three words, those words would be frictionless value transfer, where the value could be a professional service, not just money. Frictionless value transfer was its own big idea in 2018. Here's an interesting note, Square and PayPal are the two big digital wallet companies in the United States. Instead of betting on one or the other, ARKF has them both as the top two positions. If only Cathie Wood would tell us why!

Fintech is probably one of the most misunderstood of all of the technology platforms. Digital wallets are going to, we believe, gut banks. So remember I told you the indexes have value traps. We think banks are among them.

Here's a look at how the fund weights have changed over the quarter. ARKF has doubled in assets under management, and the dollar scale on the bottom of these bar charts reflect that. And because ARKF has doubled in size, the rows on this table are green only if these positions have more than doubled in size as well. So here are the frictionless value transfer stocks that Cathie Wood has doubled and tripled down on during this crazy quarter. Yeahka, ticker symbol 9923, Opendoor (OPEN), Shopify (SHOP),, ticker symbol, JD, PayPal (PYPL) and Kaspi, KSPI.

So if you're confident that the future of business, money and professional services is moving online and will be driven by artificial intelligence, those are some companies whose investor presentations you should go look up while they're trading at bargain basement prices. Vision, research, technologies, companies, stocks. Now we're cruising. And speaking of cruising, the stocks in ARKQ, ARK Invest's fund themed around the autonomous revolution, focus on the physical, the way we interact with technology to move, to build things and to do our jobs. It's about efficiently storing energy and then using it in the most productive way possible by…

Oh, what's that? You just want to hear about stocks? Okay, I guess I'll save it for the next video then. ARKQ is filled with stocks that focus on autonomous vehicles, energy storage, robotics, 3D printing, and for now, space exploration. These technologies are converging to change the way we design, manufacture, power, and deliver things. If we scroll down to the top ten holdings, we can see that Tesla sits at the top of this fund because ARK Invest believes that Tesla will be the winner in autonomous ride hailing.

The big idea being that people will stop owning cars which are depreciating assets and will start hailing them only when they need them.

Suffice to say you're still very long, Tesla, right. We don't have to go to the story. The taxis. I get it right.

I think many firms understand how big it's going to be in electric vehicles. No one's giving a credit for autonomous. Our conviction on its autonomous strategy has increased significantly over the last few months.

There's a lot of overlap between ARKQ and ARKX, ARK Invest's newest fund themed around space exploration, so it might be worth covering both of them together. For example, Trimble, ticker symbol TRMB is number two in ARKQ and number one in ARKX., ticker symbol JD, is number four in ARKQ and number five in ARKX. And Kratos Defense & Security, ticker symbol KTOS, is number five in ARKQ and number three in ARKX. The reason that ARKX overlaps a lot with ARKQ is because many of the technologies in orbital and suborbital aerospace focus on Internet, GPS, imaging, and other forms of remote sensing, which are the exact same technologies that autonomous taxis and industrial machines need to do their jobs.

ARKQ and ARKX both contain 3D printing stocks, but for the exact opposite reasons. ARKQ has them because 3D printers are a type of robot and offer up a lot of automation opportunities in manufacturing. ARKX has them because 3D printed parts are often used in aerospace, since they can be made lighter and stronger via designs that traditional manufacturing just can't make. Google is in both of these funds for opposite reasons as well. I believe it's an ARKQ because of their artificial intelligence programs like Deep Mind as well as Waymo, Google's self driving car program.

The reason companies like Google, Netflix, Amazon and Tencent are in ARKX is because they're prime beneficiaries of the world becoming more and more Internet enabled through satellite based Internet, since their services will be among the first that new Internet users would sign up for. ARKQ grew by a whopping 88% this quarter. You can find a bar chart like this for ARKX's opening positions in the downloadable version of this presentation in the description below. Because ARKQ grew by 88%, the green rows in this table are the positions that grew in it by more than 88%.

Magna International, ticker symbol MGA, Teradyne (TER), Nvidia (NVDA), Baidu (BIDU), Raven Industries (RAVN). And once again,, ticker symbol JD. So, if you believe that autonomy, robotics and advanced manufacturing are going to change the way we produce and move things around the world in the future, or you just think drones are totally awesome. Those are the ones that ARK Invest has been buying in big amounts in this space. We're almost home. The last pure play thematic ARK fund is ARKG. Okay, I can do this. All the companies in ARKG are innovating in things like specialized cell or gene therapies, DNA sequencing, healthcare specific big data, medical devices or agricultural biology.

They're working on extending or enhancing quality of life, human or otherwise. Here's what Cathie Wood thinks about genomics.

If I look backward. As you will know, Tesla accounts for almost a fifth of the return that you have generated in that five year time span. Which of your current Holdings, Cathie, do you think will supply the biggest lift in the next five years?

Tesla is still in the running, but I would have to say the biggest upside surprises are going to come from the genomic space, and that's because the convergence of DNA sequencing, artificial intelligence and gene therapies, importantly, CRISPR gene editing are going to cure disease. That convergence is going to cure disease. Our research would be focused better on the next set of FAANGs, and I don't mean FAANGs, meaning in the Internet age, we actually think that next FAANGs are in the genomic age.

The positions inside ARKG have changed substantially over this past quarter. The fund is grown by about 16%, but don't let that fool you. Cathie Wood is making moves. She's doubled down and then some on 10X Genomics, ticker symbol TXG, Veeva Systems (VEEV), Accolade (ACCD), Takeda Pharmaceutical (TAK) and has more than seven X'd her position in Sarepta Therapeutics, ticker symbol SRPT. Holy moly. I know what investor presentation I'm looking up right after this. And last but not least, we have ARKK. There are two special things you need to know about ARKK.

First, it's a 21.2 billion dollar fund by assets under management. That means it's almost as big as every other fund put together. And second, ARKK contains no unique stocks. It only holds stocks that are in at least one other actively managed ARK fund. Said another way, if we show all of ARK Invest's holdings on the same bar chart, there's no red only bars, and bars with any red in them are high conviction stocks by definition, since these funds are all conviction weighted and managed by the same Cathie Wood.

Going back to the bar chart for just ARKK, what you're looking at here is the change in conviction among the highest conviction holdings across all of the other ARK funds from the start of the quarter until now. The assets under management in Arc Invest's massive flagship innovation fund have grown by almost 20% in the last quarter. So here's the table of its position changes where green means a more than 20% increase in shares held in that stock. Let's talk about some of these big upward movers. Zoom Video Communications, ticker symbol ZM is enabling businesses all over the world, across every market, sector and vertical to communicate securely and remotely.

They've supported over 3 trillion minutes of communications in the last quarter alone. That's not a mistake. 3 trillion. Zoom is an enterprise audio and video communications platform. Shopify, ticker symbol SHOP is enabling businesses of all sizes across all verticals to sell goods and services online and in store, manage their businesses, and market themselves across many important channels. Shopify is an ecommerce business management platform. Unity Software is enabling businesses in all sectors, from automotive and architecture to filming and gaming, to create immersive and interactive digital experiences that can integrate with many other industry software packages.

Unity Software is an interactive 3D, virtual and augmented reality visualization platform. Unity Software is ticker symbol U. So I'm not surprised that ARK is really bullish on it. And speaking of being bullish on ticker symbol U, how's that for smooth segue? I treat your time as an investment. So here's how your investment is growing and what you can expect going forward. Since the last State Of The ARK, this channel has made 15 videos, not including this one, basically moving from two videos a week to one and focusing on quality.

I always try to keep these videos packed with value and never waste your time. This quarter, I've been approached by all sorts of potential sponsors, finance apps, stock and crypto trading platforms, VPN Solutions, the list goes on. I don't use the products or services from any of these sponsors, so I rejected them. Denying sponsors that are irrelevant to my audience is another way I can respect your time, so these videos will remain unsponsored until something comes up that makes sense to put in front of you. I've also kept my promise of cutting one ad per video.

You'll never get me, almighty YouTube algorithm. Hey, wait. If each ad is a quarter minute long, then I've saved my audience about ten months of combined ad watching over this last quarter. I'm really proud of that. ARKF those ads. This quarter, all of my projects focused on community. I started a Patreon and launched YouTube memberships, and I'm incredibly grateful to have over 100 paying supporters in each. I'll tell you how I've been spending your money in just a moment. The feedback I've kept getting from everyone who's investing in the channel is to talk more about individual companies and stocks.

So I launched Ticker Symbol Live, where we talk about one company in ARK Invest funds every day, and I can talk to the community in real time. I also created a Discord community dedicated to investing in disruptive innovation, and it now has over 4000 members. I'm really proud of creating a place where people can go to share their ideas about the future and their investment opportunities directly with each other. I'll leave a link to that in the description below, just in case you're interested. Creating that discord community was one of the best things to ever happen to this channel, because that's how I met my editor.

Just like with sponsors and ads, I deny a lot of outside influence over the channel. I'm a do it yourself kind of guy. Ticker Symbol: You's editor is first and foremost an investor. He's passionate about stocks, particularly ARK Invest and disruptive innovation. In his free time, he makes his own videos about the craziness of the stock market, so that shows you where his head and his passions are at. And that's great because him doing that lets me focus on the stuff I'm actually good at: researching technologies that expand my vision of the future and my investment thesis in it.

And, of course, sharing that with you. This is Ticker Symbol: You. My name is Alex, reminding you that the best investment you can make is in you.

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Alex Divinsky

💰 Investing in our future through disruptive innovation, ☕ lover of coffee, 📺 host of Ticker Symbol: YOU on YouTube

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