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2021 has been a rough year for Cathie Wood, but Cathie now believes Ark Invest will generate an average rate of return of 35 to 40% per year over the next five years. That’s a bold claim to make, but Cathie’s conviction is backed by a multitude of factors that are all converging to provide the greatest opportunity she’s ever seen. Some individual investments that we will cover have the potential to achieve 8 to 25X returns in the next five years by Cathie’s projections.
There are numerous reasons to believe that the market will crash. The new COVID variant is spreading. China’s real estate bubble is suffering. Interest rates may increase and quantitative easing is likely going to decrease soon. Although some of these concerns have merit for the overall stock market, Cathie believes that Ark Invest related stocks are about to experience the biggest bull run in history. The short term spread between ARKK, which is the Ark Invest innovation ETF, and the S&P 500 has begun to expand over the past year. The reason for this centers around the issues I mentioned earlier. The most prominent economic concern of the list is inflation. More specifically, the impact that inflation has on interest rates and quantitative easing, which is when the Federal Reserve purchases bonds. High inflation hurts growth stocks the most because investors will want current profits rather than future profits. Fed chairman Jerome Powell recently implied that inflation is not transitory anymore, which is a sign that interest rates may increase faster than expected. Powell’s warning about inflation should have increased bond yields to adjust to new inflation expectations. This is because when inflation increases, inflation adjusted returns, also known as real returns, decrease. Therefore, bond yields must increase to keep real returns at a similar level. Essentially, the bond yield should theoretically increase if inflation expectations do as well. However, the bond market actually reacted in the opposite direction. Cathie Wood sees this market reaction as a signal that a massive crash is coming for consumer prices. Inflation has stayed longer than Cathie expected and inflation expectations are still increasing right now. The rising consumer prices are primarily spearheaded by a lack of supply, which won’t last forever. Cathie believes that consumer prices are about to crash dramatically once supply chains become overstocked with inventory. The bond market’s opposite reaction was a sign of the impending crash in prices.
Another factor impacting inflation is China. The Chinese economy is starting to slow down as real estate developers are failing to pay the interest on their debt payments. The government’s increased regulation has helped instigate the Chinese real estate crash. And when the Chinese economy crashes, commodities crash as well, which causes substantial deflation. I covered this topic in-depth in a previous video that is linked on the top right of the screen. Even if interest rates do increase, Cathie believes that consumer prices will crash so much that the Federal Reserve will have to rethink their actions.
So now you might be wondering, how would this impact Ark Invest and the stock market at large? The crash in the Ark Invest ETFs in 2021 was initiated by high inflation, but if what we talked about is true, then Ark Invest is about to experience one of the largest bull runs in history. Back in February 2021, Cathie only expected 15% annual returns, but now she sees 35-40% annual returns from here. This is because decreasing valuations equate to higher expected future returns, as long as future price targets remain the same. For instance, let’s say Cathie Wood expects Teladoc to reach $500 per share in 2026. If Teladoc dropped from $250 to $100 and the $500 price target remained the same, investors can expect a 5X return instead of a 2X return. This relationship is similar to how bond prices decrease when bond yields increase. Decreasing valuations for stocks only increase future returns if the fundamentals remain intact.
That’s right, Cathie Wood thinks Ark’s ETF is going to more than 4X in 5 years, but there are a few stocks that she believes will return even more than that.
Join Interactive Brokers here: https://www.interactivebrokers.com/mkt/?src=casgainsy&url=%2Fen%2Findex.php%3Ff%3D1338
Casgains's Recommended Investing/Business Books: https://docs.google.com/spreadsheets/d/1DI8ca5GLEfQXU34uplO3E3w6YHXbvMbK1JR-GxXBeUc/edit?usp=sharing
My Second Channel:
https://www.youtube.com/channel/UCPkDot_lMk7HB_c68HubbUg
Twitter: https://twitter.com/casgains
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Contact for business inquiries only: casgainsacademy @gmail.com
2021 has been a rough year for Cathie Wood, but Cathie now believes Ark Invest will generate an average rate of return of 35 to 40% per year over the next five years. That’s a bold claim to make, but Cathie’s conviction is backed by a multitude of factors that are all converging to provide the greatest opportunity she’s ever seen. Some individual investments that we will cover have the potential to achieve 8 to 25X returns in the next five years by Cathie’s projections.
There are numerous reasons to believe that the market will crash. The new COVID variant is spreading. China’s real estate bubble is suffering. Interest rates may increase and quantitative easing is likely going to decrease soon. Although some of these concerns have merit for the overall stock market, Cathie believes that Ark Invest related stocks are about to experience the biggest bull run in history. The short term spread between ARKK, which is the Ark Invest innovation ETF, and the S&P 500 has begun to expand over the past year. The reason for this centers around the issues I mentioned earlier. The most prominent economic concern of the list is inflation. More specifically, the impact that inflation has on interest rates and quantitative easing, which is when the Federal Reserve purchases bonds. High inflation hurts growth stocks the most because investors will want current profits rather than future profits. Fed chairman Jerome Powell recently implied that inflation is not transitory anymore, which is a sign that interest rates may increase faster than expected. Powell’s warning about inflation should have increased bond yields to adjust to new inflation expectations. This is because when inflation increases, inflation adjusted returns, also known as real returns, decrease. Therefore, bond yields must increase to keep real returns at a similar level. Essentially, the bond yield should theoretically increase if inflation expectations do as well. However, the bond market actually reacted in the opposite direction. Cathie Wood sees this market reaction as a signal that a massive crash is coming for consumer prices. Inflation has stayed longer than Cathie expected and inflation expectations are still increasing right now. The rising consumer prices are primarily spearheaded by a lack of supply, which won’t last forever. Cathie believes that consumer prices are about to crash dramatically once supply chains become overstocked with inventory. The bond market’s opposite reaction was a sign of the impending crash in prices.
Another factor impacting inflation is China. The Chinese economy is starting to slow down as real estate developers are failing to pay the interest on their debt payments. The government’s increased regulation has helped instigate the Chinese real estate crash. And when the Chinese economy crashes, commodities crash as well, which causes substantial deflation. I covered this topic in-depth in a previous video that is linked on the top right of the screen. Even if interest rates do increase, Cathie believes that consumer prices will crash so much that the Federal Reserve will have to rethink their actions.
So now you might be wondering, how would this impact Ark Invest and the stock market at large? The crash in the Ark Invest ETFs in 2021 was initiated by high inflation, but if what we talked about is true, then Ark Invest is about to experience one of the largest bull runs in history. Back in February 2021, Cathie only expected 15% annual returns, but now she sees 35-40% annual returns from here. This is because decreasing valuations equate to higher expected future returns, as long as future price targets remain the same. For instance, let’s say Cathie Wood expects Teladoc to reach $500 per share in 2026. If Teladoc dropped from $250 to $100 and the $500 price target remained the same, investors can expect a 5X return instead of a 2X return. This relationship is similar to how bond prices decrease when bond yields increase. Decreasing valuations for stocks only increase future returns if the fundamentals remain intact.
That’s right, Cathie Wood thinks Ark’s ETF is going to more than 4X in 5 years, but there are a few stocks that she believes will return even more than that.
How Look at the US stock market, even with all of its ups and downs, over time, with a constant savings of your income, taking advantage of IRA’s, 401k’s or just buying and holding S&P index funds, the earlier you start saving the more money you will, have at 50, 55 or 60 or 70.
cachie believes in many things.
I HAVE BEEN MAKING LOSSES TRADING MYSELF…I THOUGHT TRADING ON DEMO ACCOUNT IS JUST LIKE TRADING THE REAL MARKET… CAN ANYONE HELP ME OUT OR AT LEAST ADVICE ME ON WHAT TO DO?
I’m all in no matter how the market goes, so far I’ve scaled fro $150k to $380k and I tend to get to a million soon enough,and I’ll probably need more assistance to reach this milestone with the way the market is currently moving
Maybe I'm just super privileged, and/or live in a bubble, but I don't see inflation in my everyday life. Fake news.
Foxconn will build the Apple BEV in Lordstown, Ohio.
ARK want's to keep TSLA at less than 10% of any fund. As TSLA goes up, it becomes a bigger and bigger component. So they re-weight it.
<The year 2021 has been like a rollercoaster so far. The markets started off with a bang, with Redditors gathering and shaking up Wall Street by trading Gamestop stocks. Then, Bitcoin started spinning the charts up and down, Ethereum surprised pretty much everyone with its price hikes, altcoins started booming like never before (just think about DOGE), new market actors even rushed in to join the race. After all this, if you are still on the fence about getting in because you are worried that it’s too late to get started then you have to trade with the guidance of a professional<In three weeks of trading I have been able to make 9 btc using signals from mavis. he can easily be reached on Telegram as [ Mavismarsh ]
Yah just buy Gold and Silver !
The for "profit" investor is an extinction event.
The greed filter of the great filters. What einstein warned us about….our predatory phase. Death by psychic/ economic cannibalism.
The bull investors are the most greed-psychotic of all.
I SAW HER STOCKS CRASHED 50% OR MORE IN 2021 DKNG PLTR CRSP AND MORE. SAVA AND UPSTAIR ALSE BLUNKED. BABA BIDU JD PDD ALL DOWN 50% EVEN MORE 👎👎 I LOST A TON OF MONEY LISTEN TO U
Cathie THE homeless
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless.
Any ev stocks will go nuts
SAVE YOUR MONEY AND INVESTING IT INTO STOCK MARKET WILL BE THE WISEST THING TO DO TO ENSURE SUCCESS.
Cathie Wood's selling of Tesla: to reduce overexposure to any one stock Ark sells the stock when stock reaches more than 10% of the portfolio. The proceeds are used to purchase other stock that ARK is bullish on especially when there has been a dip in the stock. I'm not worried that her funds sold some Tesla stock.
Still can’t figure out why she thinks inflation is transitory
are you an effective team?
Anyone who runs a fund that spends more time worrying about macro trends instead of looking at businesses is not someone to pay attention to
Which Crypto she is Buying? Now
The issue I have with ARK is that I can’t tell what the competition is doing and there are other factors that drive consumer choices. For instance, I own ARK-F due to the fin-technology companies like square, PayPal, etc have. But I also here that Bank of America is adopting these technologies, so I’m not sure the ARKF companies will disrupt banks and other finance companies.
Well folks, on the long term Cathie is always right. In 2018 when bitcoin crashed she predicted the 50k soon, when Tesla was around 100 dollar she saw 12X was coming. And she was alone but was right.
In times of crisis using traditional algorithms is dangerous and a great way to lose all your money.
Let s see Miss CW….
Great analysis I trade with my strategies because they are always accurate it helps me even when market ain't favorable while others complain I earn Big. Add me on comberleroy Telegram
The fact that she couldn’t see supply issues coming is a red flag.
If you like to gamble you can go to the casino, play the lotto, or a bet on Kathy Wood
She found hex ?
Not a single manager in the world can beat SPY index consistently.. Proof
dec. is shopping time,all on sale!!!! 😋
Cathie lost 30 percent this year…
If I have to hear the word Disrupted again I’m going to disrupt someone upside the head.
After disasters don't see supplies going up.
If you can afford the risk, do everything to reach financial freedom early. crypto makes it possible.seen 1000s do it.