在2021年3月5日的“ In Know”中，ARK的CEO / CIO Cathie Wood評估了ARK的研究和預測，顛覆性創新，懷疑態度，對ETF包裝的誤解，波動性以及散戶投資者vs.機構投資者。與往常一樣，她還討論了財政政策，貨幣政策，市場信號，經濟指標等等。ARK的首席執行官兼CIO Cathie Wood，她在這段與冠狀病毒（COVID-19）大流行有關的不確定性期間提供了簡短的回顧。保持健康。下面為大家COPY and PASTE 了下面transcript 比大家參考。
00:10
greetings everyone
00:11
this is kathy wood at arc invest
00:14
well it certainly has been uh an
00:17
exciting week i guess you could call it
00:19
an exciting week it’s given us
00:21
lots of opportunities um we had
00:25
an analyst join us today first day is
00:27
today
00:28
will summerlin he will be uh following
00:31
artificial intelligence
00:33
and partnering with uh max friedrich
00:36
uh on our fintech strategy and uh
00:40
the first words as he was introducing
00:42
himself today to the rest of the firm
00:44
his uh his first words to us were
00:48
it is an exciting time to be alive and
00:51
arc is at the forefront of all of the
00:54
amazing changes taking place out there
00:57
so that was very gratifying to hear
00:59
especially
01:00
after the last few weeks i know there’s
01:03
a lot of fear
01:04
uncertainty and doubt evolving in the
01:07
world out there
01:08
but we’re doing a lot of original
01:11
research we have a five-year
01:13
investment time horizon and we are truly
01:16
excited
01:17
about the opportunities that the last
01:19
few weeks have presented us
01:22
as you know our minimum hurdle rate of
01:25
return for any stock to
01:27
enter our strategies is
01:30
15 at a compound annual rate over five
01:34
years that’s a doubling over five years
01:37
well you can imagine uh what has
01:39
happened over the last few weeks
01:41
market activity alone has taken that
01:44
projected rate and again it’s just a
01:47
projection we could be
01:48
wrong the world could end there i have
01:52
i’m sure i have compliance uh monitoring
01:55
me very carefully when i say this so i
01:57
want to say it correctly
01:59
but according to our projections
02:02
what these last two weeks have done
02:05
is handed those who are averaging in
02:09
to these sorts of strategies any
02:11
innovation strategies
02:14
a gift because we do believe we’re on
02:16
the right side of change
02:18
and disruptive innovation transformative
02:22
innovation is is going to
02:25
deliver exponential growth trajectories
02:29
for many of our companies
02:31
in fact most of them the growth rates
02:34
are
02:36
are enormous and i think some people
02:39
find them unbelievable to give you an
02:42
example
02:43
electric vehicles we expect unit sales
02:47
of electric vehicles
02:48
globally including china to compound
02:52
at an 82 annualized rate during the next
02:55
five years
02:56
uh most people when they see a number
02:59
like that
03:00
they’ll just say i don’t believe it it’s
03:02
not possible
03:03
and the reason for that the reason we
03:05
face that
03:06
uh skepticism often is because
03:09
uh of where the automobile industry is
03:12
right now
03:12
is very mature it’s not growing in fact
03:15
we believe
03:16
it has peaked and uh and that that means
03:20
all cars are in secular decline
03:24
if we are right that we are moving into
03:26
more of a ride sharing
03:28
both human driven and autonomous uh
03:31
during the years ahead
03:33
uh so this idea that electric vehicle
03:36
sales could grow at an 82 annual rate
03:39
just not going to believe it
03:40
uh and uh and so that skepticism
03:46
festers especially i would say among
03:49
institutional investors whose analysts
03:52
on the
03:52
auto sector for example are mostly value
03:56
analysts
03:57
so there are a lot of those disconnects
03:58
in the world
04:00
that are creating great opportunities
04:02
for us and
04:03
uh and so i wanted to say that at the
04:07
outlet because will
04:08
is on to something you know uh there
04:11
are trends evolving here that
04:14
are really fostering a lot of skepticism
04:19
especially the growth rates and the
04:21
sustainability of the growth rates
04:24
but our research based on wright’s law
04:26
gives us an extreme
04:28
sense of confidence that we are on the
04:31
right track
04:32
and that truth will win out uh so
04:35
i’d like to talk a little bit about um
04:38
another source of controversy in the
04:41
last few weeks
04:43
the etf wrapper seems to be somewhat
04:46
misunderstood
04:48
now i have managed money in all kinds of
04:52
wrappers
04:53
and for me the etf wrapper has been
04:57
the easiest and the reason is
05:00
i do not have to deal
05:04
with the flows either inflows or
05:06
outflows
05:07
around any of our strategies
05:11
all i need to do as the portfolio
05:14
manager
05:15
is make investment decisions and so we
05:18
trade around volatility regularly we
05:21
expect
05:22
volatility it’s actually helpful to us
05:25
from a tax efficiency point of view
05:28
as well and so we have an
05:32
ecosystem outside of arc
05:35
now our compliance department and our
05:38
operations department
05:40
are interacting with the ecosystem
05:44
if needs be but what we’ve learned is
05:47
this
05:47
wrapper and the ecosystem around it
05:51
is extremely liquid
05:55
we have not had any difficulties
05:58
whatsoever
05:59
ever with either days when there have
06:02
been
06:03
big inflows or big outflows
06:06
and we do see both uh we have
06:10
i have been impressed uh truly impressed
06:14
that uh the etf ecosystem is
06:17
as efficient but our spreads have hardly
06:21
widened at all the spread between the
06:24
bit and the ask which is where you would
06:25
see
06:26
some duress if there were if there were
06:29
[Music]
06:30
bottlenecks in the system we do also get
06:34
uh
06:34
questions about uh our disclosures
06:38
uh at the end of every day well uh we
06:42
have a a transparent we were approved
06:45
as a fully transparent active
06:49
equity etf and there are not many
06:53
uh of us out there and so i know
06:57
what we’re doing again we just have to
06:58
keep educating
07:00
we have to disclose our holdings at the
07:04
end of every day
07:05
and um and so we do but we also go one
07:09
step beyond
07:10
because we know anyone who wants to
07:14
understand our trading
07:15
activity could reverse engineer
07:19
our disclosures at the end of the day
07:21
that are required
07:24
by the regulators
07:27
they could reverse engineer so we we
07:29
figured in the early days especially
07:31
because we wanted
07:33
market makers and authorized
07:34
participants and prospective clients
07:38
to understand what we’re doing so they
07:40
don’t feel
07:41
they’ll be caught flat footed shall we
07:45
say from a trading point of view
07:46
we said we’ll we’ll publish our trade so
07:49
you understand and you’re not going to
07:50
be offsides
07:52
we want this ecosystem to work uh well
07:55
around our strategy and as i said it has
07:59
and i think disclosing uh our our trades
08:02
at the end of every day
08:04
has has become very important to many
08:07
people who uh own uh
08:10
own our strategies participate in um
08:13
our strategies uh but also for others
08:16
who don’t
08:17
uh and you know it’s developed a life of
08:21
its own out there there are youtube
08:22
videos
08:23
and uh and blogs and so forth around it
08:27
and what i think this is doing is
08:29
bringing
08:30
uh the retail investor particularly the
08:33
young retail
08:34
investor that into
08:37
the investment realm in in a healthy way
08:40
they want to understand what
08:43
uh is going on they love transparency
08:47
and so we try to provide as much of that
08:49
as possible
08:51
and the other thing i think uh is going
08:54
on and
08:54
and and i do think this is going on um
08:57
we uh we have noticed uh and uh
09:01
our our intermediaries have noticed that
09:04
uh
09:05
there’s been elevated options activity
09:08
in our funds both uh on the strong days
09:11
and and on the weekdays um
09:14
well that that probably is the case
09:18
and uh here i’m going to to give you a
09:21
sense of
09:22
why i think that’s the case
09:25
i think that there are there is a big
09:28
difference
09:28
between the way institutional investors
09:32
look at investing
09:34
and retail investors i mean we know
09:37
that that the tesla example is a good
09:41
one
09:41
to uh to illustrate the differences
09:45
and i know there was a lot of
09:46
frustration and it seems to have been
09:48
pent up
09:49
uh over many years uh about
09:52
uh tesla and uh and uh you know our
09:56
research on it
09:57
a lot lots of fear uncertainty and doubt
10:00
uh
10:01
with which we had to contend but but we
10:04
thought it was a good thing the
10:06
the the debate uh the the a lot of
10:09
institutions are set up are not set up
10:13
actually to
10:14
analyze a stock like tesla
10:17
they the the and i’m not saying all
10:21
institutions but i’m i’m saying most
10:23
institutions
10:25
the reason for that is after the tech
10:27
and telecom
10:28
bust uh 20 years ago almost to the day
10:32
march 10th
10:33
uh it started 21 years ago um
10:37
and then on top of that the 0809
10:40
uh meltdown in the equity markets and
10:43
the bond markets
10:45
uh there developed a lot of risk
10:48
aversion
10:49
and volatility became a bad word
10:52
uh we have a volatile strategy
10:56
and we use that volatility to our
10:58
benefit trading
10:59
around positions volatility is not a bad
11:03
word
11:04
in a bull market volatility you’ve seen
11:07
you’ve seen what happens in a down
11:10
market
11:12
what has happened is um institutions
11:15
tend to be very benchmark sensitive and
11:19
i’m going to use tesla
11:20
as an example here tesla as you know
11:22
many of you know
11:24
did not enter and enter the benchmarks
11:26
until
11:27
last fall when it was over 500 billion
11:31
dollars in market cap so there was a lot
11:34
of invest there were a lot of investment
11:38
returns
11:39
to have up to that 500 billion and we
11:41
were happy to be there
11:43
and we’re happy that institutions are
11:45
joining us now
11:47
but they’re joining us primarily because
11:49
tesla entered the indexes
11:52
i’m not sure they really are trusting
11:55
this
11:56
and the reason for that is their
11:59
auto analysts tend to follow
12:03
the traditional auto industry
12:07
and the traditional auto industry is
12:10
very mature uh and as i mentioned before
12:14
we think it’s in decline
12:15
um and uh we’re focu we
12:19
are focused on exponential growth
12:21
opportunities
12:22
uh we believe a sub-segment of the auto
12:25
industry
12:26
is going to see exponential growth for
12:28
the first time in a hundred years
12:30
and so that’s our sole focus
12:33
institutions have hired
12:35
analysts to focus on an industry that is
12:38
mature
12:39
and now there’s a transformative
12:42
uh really revolution taking place
12:46
that will alter the auto world
12:49
completely
12:50
there was a lot of skepticism uh the
12:52
auto industry itself didn’t expect
12:54
electric
12:55
electric vehicles to to amount to much
12:58
of
12:59
anything uh for i think they thought it
13:02
wouldn’t take until the mid
13:03
twenties uh well it’s here and
13:07
we we began to invest aggressively
13:11
in the space on that assumption as we
13:13
saw battery pack system cost decline
13:16
as rapidly as they have been declining
13:18
and so uh
13:20
i think um uh that that kind of tug of
13:24
war between
13:25
the traditional backwards-looking
13:28
uh world which is based on benchmarks
13:31
benchmarks uh and certainly the the
13:34
top positions in benchmarks are where
13:37
they are because of past
13:38
performance uh arc is focused
13:41
on the future uh especially on the
13:44
future
13:45
that involves transformation and so
13:49
benchmarks i think have been an
13:51
impediment and
13:53
and and setting up research
13:56
organizations
13:57
in the way they’ve been set up is also
14:00
an impediment to some of the new ideas
14:03
the other
14:04
difference between uh what arc is doing
14:07
what a lot of retail investors focus on
14:11
is uh time horizon uh i know that
14:14
institutional investors are much
14:18
uh more short-term many not all
14:21
uh and uh they’re very focused again on
14:23
the benchmark
14:24
uh so this idea of uh being graded every
14:27
year based on
14:28
how well an analyst or portfolio
14:32
manager did relative to a benchmark is
14:35
quite constraining
14:37
the luxury we have and retail investors
14:40
have
14:40
is retail investors really don’t have
14:43
career risk
14:44
we might have a little bit more of that
14:46
of course given what we do
14:49
but we have a five-year time horizon
14:52
that is a luxury
14:53
that’s a luxury and the difference
14:55
between linear growth
14:57
and exponential growth in the early
14:59
years when
15:00
electric vehicles are at 500 000
15:03
a couple of years in in sales globally
15:06
last year 2.2 million
15:09
in the those early years because the
15:11
bases are so low
15:13
there doesn’t seem to that doesn’t look
15:15
on a graph to be that much difference
15:17
between
15:19
linear growth and exponential growth
15:21
trends
15:23
you give that a few more years and the
15:25
difference
15:26
is quite surprising i mentioned that 82
15:29
percent growth rate
15:30
we really believe that’s going to happen
15:32
especially now that china
15:34
is pushing hard i don’t think
15:37
traditional auto analysts still
15:39
believe that could happen the third
15:42
issue that institutions are grappling
15:44
with that we are not and that retail
15:46
investors are not
15:48
is that the analysts are very siloed
15:52
and specialized by industry
15:55
or sub industry or sub sub industry
15:59
that is just how the market evolved over
16:02
over the last few years
16:03
the problem with that is these
16:06
new innovation platforms around which
16:09
arc has
16:10
centered its research and investing
16:14
are cross sector in their ramifications
16:18
so it is the platforms that we have
16:21
centered
16:22
our analysts responsibilities on
16:25
and they are generalists and all of them
16:28
are comfortable with
16:29
technology very comfortable
16:33
healthcare oriented analysts very
16:35
comfortable industrial
16:37
you do not find that in uh in
16:40
institutions and i
16:41
truly believe that research departments
16:45
in institutions will have to reorganize
16:48
in order to invest successfully
16:52
or optimally shall i say uh in
16:55
innovation going forward
16:57
our analyst responsibilities as i said
16:59
broken out by
17:00
uh platform and technology and uh
17:04
and and the reason that’s becoming more
17:06
important
17:08
is because the platforms are are
17:11
converging
17:12
so it’s getting even more complicated
17:14
autonomous taxi networks
17:16
uh involved three of our platforms um
17:19
and you’ve heard me say this before but
17:22
some of you may not
17:23
uh autonomous vehicles are robots
17:27
that’s one of our platforms robotics
17:30
they will be electric so energy storage
17:34
battery pack systems another one of the
17:36
platforms evolving out there
17:39
and they will be powered by artificial
17:41
intelligence
17:42
another one of our platforms uh it is
17:45
very
17:46
difficult in a traditional institution
17:49
which is very siloed
17:51
to have analysts collaborate
17:54
uh in that way they haven’t been set up
17:56
to collaborate
17:57
our analysts are all about collaborating
18:00
so the world
18:01
is changing we set up arc
18:05
to accommodate uh or acclimate to this
18:08
new world
18:09
and as you know we are sharing our
18:12
research
18:14
on social media so that we can engage
18:16
with and become
18:18
a part of the communities that are
18:21
innovating
18:22
so we’re we are receiving insights i
18:25
believe because we’re willing to share
18:27
our research
18:28
we’re receiving research insights about
18:31
our research
18:32
from those uh in the field are we making
18:35
incorrect assumptions
18:37
that would be good to know early in an
18:40
exponential growth trajectory because if
18:43
you make an
18:44
incorrect uh assumption
18:47
in the early stages of investing
18:50
an exponential growth trend and you
18:53
carry that mistake out
18:54
you can make big mistakes so just wanted
18:57
to
18:58
share a little bit why the disconnect
19:00
between
19:01
um traditional institutions and perhaps
19:04
what we’re doing
19:05
and by the way how we complement what
19:07
they’re doing
19:08
we think that uh because of their focus
19:11
on benchmarks which is more
19:13
about what has happened historically
19:15
they are
19:16
they’re uh the risk of the the
19:19
companies in their portfolios being
19:21
disrupted
19:22
by the tradition by the new uh
19:25
technologies
19:27
is is going to cause
19:30
them to or their portfolios to
19:33
populate increasingly we believe with
19:36
value traps so we’re a good hedge
19:39
against the broad-based benchmarks out
19:42
there
19:43
um so as will said yes
19:46
it’s exciting to be alive and we’re
19:49
as excited as ever about uh
19:53
everything we’re doing the last few
19:55
weeks
19:56
hasn’t done anything except increase
20:00
uh the the returns that we expect
20:03
uh from each of our stocks to the extent
20:06
they’ve come down
20:07
it’s only the market that has changed
20:10
that
20:11
uh because a five-year investment time
20:13
horizon
20:14
um uh you know doesn’t that the the
20:17
research
20:18
doesn’t change we haven’t seen anything
20:21
to change
20:22
our research assumptions or conclusions
20:25
in fact during periods of turmoil
20:28
and elevated risk and fear fear
20:32
uncertainty and doubt
20:33
innovation actually gains more traction
20:36
faster the coronavirus was
20:40
the best example i’ve ever seen of it
20:42
but even markets like
20:43
uh today will since we’re still in
20:47
a period of heightened risk around the
20:49
coronavirus
20:50
will probably uh encourage decision
20:54
makers who were
20:55
maybe on the fence about a new
20:56
technology to jump off and just say okay
20:59
let’s go so i i am never
21:02
uh afraid of uh times like this
21:05
and just to address one other question
21:08
this bubble question we are not in a
21:11
bubble
21:12
although compliance would have me say i
21:14
do not believe we are in a bubble
21:16
uh rightly is is because of
21:20
how many uh how many questions we get
21:24
about being in a bubble and uh
21:27
and how much fear there is that we’re in
21:30
a bubble
21:31
is because the seeds of what um
21:35
we believe will happen during the next
21:38
five years so
21:39
these five innovation platforms
21:41
involving 14 to technologies
21:43
the seeds for all of them were planted
21:46
more than 20 years ago in the tekken
21:49
telecom
21:50
bubble and even before that so the pc
21:52
and the internet together
21:55
and then the internet of course the
21:57
bubble uh
21:59
caused a rush of capital into
22:02
what in they were actually the dream at
22:05
the time the dream was right
22:07
uh it was just 20 to 25 years too early
22:11
amazon may be being an exception an
22:13
important one and showing the way
22:16
and so therefore we’re in the period of
22:20
reality
22:21
the seeds are beginning to flourish we
22:24
are ready for prime time that is what we
22:26
truly believe
22:28
and uh so this notion of a bubble i
22:30
think is born
22:31
once again out of the benchmark
22:34
sensitivity and
22:36
backwards looking nature of a lot of
22:39
institutional investors out there uh so
22:42
the other thing i’ll say about this is
22:44
what they should be worried about
22:47
uh is is not our strategies
22:50
or innovation based strategies they
22:53
should be worried
22:54
about their strategies because the other
22:58
side of disruptive innovation
23:00
is creative destruction and when we’re
23:02
talking about the s p
23:04
500 we think creative destruction
23:07
is going to impact nearly 50 percent
23:10
of the s p 500 and and that
23:13
and that we measure um in two ways
23:17
by uh looking at the fixed assets
23:20
out of there that will become stranded
23:23
and there are hundreds of billions if
23:25
not trillions
23:26
of fixed assets out there that will be
23:28
stranded
23:29
and of course we also look at the market
23:32
cap exposure
23:33
in those groups i’m going to fly by
23:36
now the usual drill
23:39
which is monetary policy fiscal policy
23:42
uh
23:43
economics and uh markets
23:48
because i did uh give uh or i did uh
23:51
speak about these uh things last week
23:54
but but a few things did happen this
23:55
week
23:56
um uh chairman powell of the federal
23:59
reserve
24:00
uh i guess in a wall street journal
24:02
article
24:03
was not forceful enough according to
24:05
investors in saying
24:07
that we are going to draw keep interest
24:09
rates down at all costs
24:11
i think a lot of investors wanted to
24:14
to hear uh him say yes we’re going to
24:17
try and
24:18
control the yield curve well by the way
24:20
that that really has never worked in our
24:22
country so i don’t know why investors
24:24
would think
24:25
uh that it would work this time uh
24:28
but and he um he did note uh
24:32
the disorderly market although i think
24:35
a lot of people uh misinterpreted uh
24:38
some of what he said um we believe
24:42
that interest rates going up and and it
24:44
has been a shock when you think about it
24:46
uh uh going from uh one percent to 1.5
24:50
on the 10-year treasury uh in the span
24:53
of a few months
24:55
is like an a tsunami through the bond
24:58
market right
25:00
that’s a 50 increase in yields this is
25:03
crazy talk
25:04
in in the um in the bond world but it’s
25:06
happening
25:07
and i think there’s a lot of confusion
25:10
and
25:10
risk aversion which has uh spilled into
25:13
the equity markets
25:15
we’ll take the other side of that trade
25:17
interest rates going
25:18
up long-term interest rates uh i
25:22
we believe are suggesting that
25:25
real growth is going to pick up
25:29
now i know there’s an inflow inflation
25:30
component there
25:32
and we are going to see the base effect
25:34
of last year’s
25:35
drop in prices during the coronavirus
25:38
so we could see the cpi in the three to
25:41
four percent
25:42
range it will be temporary and we do
25:45
believe that
25:46
deflationary forces associated with um
25:50
with uh disruptive innovation and
25:53
they’re massively deflationary
25:56
combined with the deflationary forces
25:59
of those companies who are going to be
26:02
put in harm’s way
26:04
by this disruptive innovation and who
26:06
have
26:07
leveraged up too much historically
26:10
usually to cater to short-term uh
26:13
oriented shareholders and to buy back
26:16
their stock
26:18
uh not invest enough in innovation they
26:21
are going to have to cut prices
26:23
ultimately
26:24
in order to uh in order to service
26:27
sell goods and service their debt so i
26:30
think those two forces
26:31
are going to combine now this isn’t
26:34
today or tomorrow we think that today
26:37
part is
26:38
the deflationary under current
26:40
associated with innovation
26:42
uh but we do believe that as
26:45
those forces come in and disrupt the
26:47
traditional world order
26:48
this other source of deflation is going
26:50
to occur
26:52
the one deflationary force is good
26:55
deflation and will
26:56
spur growth the other uh the other
27:00
force is deflationary and bad
27:04
in that it will probably lead to duress
27:06
and bankruptcies and reorganizations and
27:09
so forth
27:10
so i think there will be a lot of
27:11
confusion out there in the marketplace
27:13
um and so uh keeping your eyes
27:17
and and and portfolios on the right side
27:21
of change
27:22
is going to become very important um
27:25
so fiscal policy
27:29
government spending is is nothing more
27:32
than future
27:33
taxation in one shape in one
27:36
shape or form whether it’s inflation
27:40
which is a regressive tax
27:42
whether it’s outright taxation which
27:45
this administration
27:48
seems to be veering towards
27:51
this is not good capital gains taxes
27:55
corporate taxes
27:56
tax rates going up i think
28:00
it shouldn’t surprise the market uh the
28:02
the fiscal policy the fiscal stimulus
28:05
has been in place
28:06
for more than a year now or for about a
28:08
year now
28:09
and um and with that is going to come
28:12
taxation well now rubber is going to
28:15
meet the road we’ll find out what kind
28:17
and but i will say the closer we get
28:21
to next year the lower the odds of some
28:26
very harmful taxes because we’ll be
28:28
looking into a congressional election
28:30
year
28:31
and um the house is very close in terms
28:35
of the number of democrats
28:37
and uh the number of republicans uh
28:40
nonetheless i can’t i ca
28:42
i can tell you uh that’s not good news
28:45
we don’t have our rose-colored glasses
28:47
on there in fact we never have
28:48
rose-colored glasses on
28:50
uh contrary to what some might think
28:53
uh and then on the economy we did get
28:55
the uh employment report today
28:58
uh the employment report was a very good
29:00
one much stronger than expected from a
29:02
headline point of view
29:04
again looking into the guts of it uh
29:06
there was an offset there was a big
29:08
offset
29:08
the average week work week dropped
29:12
by 0.9 percent uh so that’s
29:15
month to month um annual and that of
29:18
course has a big impact on
29:20
income so we think the two pretty much
29:23
wash each other out and
29:28
we also think one of the things that’s
29:30
happening here
29:31
is especially in leisure and hospitality
29:35
a lot of people would not show up for
29:36
work because they were being paid
29:38
by the government not to show up for
29:41
work effectively
29:42
and so maybe some of uh them are going
29:46
back to work uh that’s a source of the
29:49
employment gains and
29:50
and and leisure and hospitality was the
29:52
biggest one
29:54
um and those uh therefore the people who
29:57
had been picking up on their shifts they
29:59
may
30:00
they may be taking a lower work week now
30:04
we still think we’re in a v-shaped
30:05
recovery this this
30:07
report does nothing to suggest otherwise
30:11
inflation if you look at the wages in
30:14
the report
30:15
quiescent 0.2 percent in line with
30:18
expectations no change there
30:21
interest rates have gone up uh this week
30:23
i think that’s a manifestation of
30:25
growth uh that’s revving up and is going
30:28
to gain more momentum as the vaccine
30:30
spreads and uh i think that’s going to
30:33
be great for profits we think
30:35
profits i used to say they’d uh end
30:39
20 and 21 at a 200
30:42
rate for the s p 500 uh now we’re
30:45
thinking it could average that for the s
30:47
p 500 so uh the market on this year
30:50
is selling at 19 times uh if you start
30:53
looking into next year which we will
30:55
starting
30:56
june that’s how the market cycle tends
30:57
to work it’s
30:59
even um less expensive than that
31:03
so now one of the things that
31:07
a lot of investors say well interest
31:10
rates have gone
31:10
up of course this is a killer for your
31:13
strategy
31:14
i don’t think the markets ever priced in
31:17
uh
31:17
interest rates at 0.5 on the 10-year
31:20
treasury
31:21
or today 1.5 i think that the market
31:25
uh and we i went through this in a
31:26
previous uh
31:28
video the market has been assuming that
31:31
interest rates would normalize somewhere
31:34
in the four four percent uh or or even
31:37
five percent range
31:39
uh and that’s how taking the inverse of
31:41
that
31:42
uh uh we we got to sort of a
31:45
normalized pe in the 20 to 25 range
31:48
couldn’t get through there uh one over
31:51
four percent
31:52
uh is 25 one over five percent is 20.
31:55
uh so we don’t think the market has uh
31:58
priced any of these low interest rates
32:00
in and so to say that
32:03
these strategies should uh go down
32:06
um because of interest rates we just
32:09
don’t buy
32:11
and then in terms of what’s happening in
32:13
the markets today
32:14
let’s address the equity market there’s
32:16
a a
32:17
big rotation taking place it’s moving
32:20
from growth
32:21
into value now this started in the
32:24
fourth quarter
32:25
and the surprise to us is that our
32:26
strategy had held up
32:28
as well as it did until the last two
32:32
weeks
32:34
and we were beginning to think oh
32:37
maybe maybe they can coexist
32:41
well we don’t think they can coexist but
32:43
what i’m about to say
32:45
might surprise you um if you’re
32:48
the the algorithms out there and and the
32:51
market is highly
32:52
algo driven these days we learn that
32:55
from the coronavirus when
32:56
algos just ripped through the market and
33:00
you know sold stocks that had
33:03
small cash cushions and were in a cash
33:06
burn situation
33:07
and uh many of those stocks uh
33:11
are held solutions to the problems
33:14
uh so you know they were cut by
33:16
two-thirds at that time it made no sense
33:18
made no sense but these algorithms
33:20
if they’re uh if they’re given just two
33:23
uh two variables they’re probably going
33:26
to make a lot of mistakes
33:28
if the variables they’re using today are
33:30
price to book
33:31
and dividend yields then
33:35
then we think that they’re going to be
33:37
very wrong
33:38
because those kinds of value stocks
33:42
uh probably haven’t been investing a
33:44
very very aggressively
33:46
uh to uh become a part of the new world
33:50
and the innovation uh that’s burgeoning
33:53
today
33:53
there are value managers out there very
33:56
good ones
33:56
who understand their biggest risks are
33:59
value
34:00
traps caused by innovation so
34:03
they’re picking their spots very well
34:06
but be careful
34:07
because value we believe is going to
34:11
continue to face massive
34:15
headwinds especially those companies
34:18
that have not invested uh to move into
34:21
the new world
34:22
and even retail many people say well
34:25
can’t possibly hurt retail any more than
34:28
than it already has
34:31
i can tell you that’s not true so if you
34:34
look in the united states
34:35
online retail as a share of total retail
34:38
uh is is roughly 20 now
34:42
it um it it grew at four times the pace
34:47
uh this year or la in the last year as
34:50
it did the prior
34:51
four years so four years into one
34:54
um so it’s close to 20 percent
34:57
if you look at s-curves where does the
35:00
sweet spot occur
35:02
it starts happening in the 10 market
35:05
share
35:05
15 20 and then there’s the takeoff
35:09
and uh given the coronavirus now we’re
35:12
all much more comfortable
35:13
shopping online there were some who just
35:16
wouldn’t do it before they they had too
35:18
much of a habit going or something
35:20
that’s changed and so i think anyone who
35:23
thinks we’re going back
35:25
back in time is mistaken and of course
35:28
retail financial services energy energy
35:31
this
35:32
uh increase in energy that’s almost what
35:34
makes me feel good about what’s going on
35:37
if you look uh year-to-date energy
35:40
stocks are up 37 and a half percent and
35:43
financials
35:43
up 13. much of that occurred in the last
35:46
month
35:47
uh 22 increase in energy just in the
35:50
last month
35:51
and 8 in financials so that
35:54
accelerated appreciation is what has
35:58
caused this
35:59
uh rotation algorithm saying okay
36:02
past is prologue it’s happening faster
36:04
let’s get rid of our growth stocks and
36:06
let’s go into value
36:07
uh the fact that those two sectors are
36:10
at the top of the league tables this
36:12
year and in the last month
36:14
makes me feel good from a couple of
36:16
points of view
36:17
one the bull market has broadened out it
36:20
did not
36:20
narrow into one strategy like the
36:23
internet in the late 80s
36:25
that was a recipe for uh
36:28
the tekken telecom bust that we saw
36:32
so this rotation is healthy a good
36:34
correction shakeout
36:35
is healthy great time to
36:38
average in to strategies you like um
36:42
and i do believe on the other hand that
36:45
energy and financial services
36:47
are going to be two of the most
36:49
disrupted sectors
36:51
thanks to electric vehicles autonomous
36:54
electric vehicles
36:55
and thanks to digital wallets um those
36:58
are two and three
37:01
of the biggest opportunities brewing out
37:04
there so the fact that energy and
37:06
financials are leading
37:08
uh the pack um suggest to me that this
37:11
is not going to be uh long lived
37:14
um i’m happy they’ve had uh such a burst
37:17
and um the the other of course the other
37:22
algo rule here is move from high value
37:25
stocks
37:25
high valuation stocks to low valuation
37:28
stocks
37:29
so again be careful a lot of low
37:31
valuation stocks are going to
37:33
be set up for disruption and uh then
37:37
the there are rules like okay let’s
37:39
follow the price momentum
37:41
just it’s a momo trade uh and again
37:44
if truth is going to win out that will
37:47
be
37:47
a losing strategy so
37:51
i guess the last thing i’ll leave with
37:53
you is a stat that i
37:55
saw just today it’s cash
37:58
in money market mutual funds
38:01
now cash in money market mutual funds
38:04
soared
38:05
during 0-809 for understandable reasons
38:08
there was so much fear and uh
38:11
and and of course uh that led to sort of
38:15
the deflationary disinflationary
38:18
period i was surprised to see
38:23
that cash in money market mutual funds
38:26
now maybe there’s a technical
38:28
explanation
38:29
but i don’t think it can be this big
38:32
is higher now than it was in 0809
38:37
it had started to come down and now it’s
38:39
moving back up again
38:42
and i think this makes sense because
38:45
as i’ve mentioned many times the
38:47
equities
38:48
have seen outflows pretty consistently
38:50
since 0.809
38:52
there’s been a flurry here and there but
38:55
pretty consistently
38:57
fixed income has seen inflows uh
39:00
cash is part of fixed income these last
39:03
two weeks
39:04
probably has um has renewed the decline
39:07
in equity
39:08
outflows and the uh and yet at the same
39:11
time potentially
39:13
a decline in fixed income
39:16
especially long duration fixed income
39:20
funds what do you do with that you put
39:22
it into cash
39:23
so that’s that’s very interesting the
39:26
cash is building on the sidelines
39:28
and we do believe there
39:31
is going to be an asset
39:36
reallocation you could see it towards
39:40
stocks and bonds away from cash bond
39:44
yields have gone up let’s extend
39:46
our duration so that uh we earn a little
39:49
bit more on our money
39:51
and uh for stocks let’s uh let’s have a
39:54
barbell strategy bonds
39:56
and um and equities
39:59
maybe even higher octane higher octane
40:03
equities so we are
40:07
we’re looking forward to sharing with
40:09
you more videos like this
40:12
and probably focusing more on the
40:15
exponential growth trends just how
40:17
powerful they are out there
40:18
how unstoppable they are if we’re right
40:23
and the cost declines associate
40:25
associated with rights law
40:27
are going to be as powerful as
40:30
as as rights law suggests
40:34
and there then you will see how getting
40:37
on the right
40:38
side of change will be a very good idea
40:42
and not just in investing getting your
40:45
children focused on the the right side
40:49
of change or your grandchildren in terms
40:51
of their education
40:53
and and you know and
40:56
inspiring them i think will become very
40:58
important as well
41:00
so i hope you all have a wonderful
41:03
weekend
41:03
and we will be uh
41:06
updating these videos uh during this
41:10
tumultuous time
41:11
we’re gonna be there for you we want to
41:13
know we want you to know
41:15
what we are thinking as you know we’re
41:17
radically transparent
41:19
we’re not a black box and we want you to
41:23
share this journey with us
41:25
because we think it’s going to be an
41:26
exciting one okay so thank you very much
41:29
have a lovely weekend
41:44
you
