In Brief:
- Shares of Wood’s flagship fund, Ark Innovation, hit a bottom in May as investors rotated into value stocks in the first half of 2021
- Earlier, In an SEC Filing Burry revealed his big bets against ARK Innovation ETF.
In an interview with CNBC, Ark Invest’s Cathie Wood defended against investors betting against her Innovation ETFs. Cathie Wood denies Ark’s stocks being in a bubble.
“I don’t think we’re in a bubble which is what I think many bears think we are,” said Wood in the interview, “…We couldn’t be further away from a bubble.”
Earlier this week, Michael Burry placed his bet against the Ark Innovation ETF, according to his latest SEC filings. Scion Asset Management bought 2,355 put contracts against the tech ETF during the second quarter and held them through the end of the period. . Burry was one of the first investors to call and profit from the subprime mortgage crisis.
Other hedge funds also have put bets against the firm’s ETFs.
“When I see such negative sentiment out there, especially when it comes to valuation and longer time horizons, investment time horizons, I actually feel a little more comfortable. I like bad news,” Wood added. “The discounting is worse now than the news actually will be. I actually feel better in that environment for our strategies.”
Wood said that the portfolio manager’s macro thesis focuses on deflation from innovation. Although, much of the bearishness on her funds are focused around inflation and interest rates going higher.
“The innovation around which we have centered our research, these five platforms: DNA sequencing, robotics, energy storage, artificial intelligence and blockchain technology, are barely off the ground,” Wood said.
Shares of Ark Innovation hit a bottom in May. The ETF did end the second quarter up 9%, but it’s still down 7% year to date.
ARKK traded down on Thursday.
“The seeds for all of these platforms were planted in the 20 years that ended in the tech and telecom bust and ended in tears and there’s a lot of muscle memory around that but that’s not what’s going on right now. I don’t think the market is ready for this. We’ve never been at a more provocative time for innovation in history,” Wood said.
