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In this video, I cover Cathie Wood's huge bet on the mispricing of "stay-at-home" stocks and "recovery" stocks.
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Cathie Wood always seems to take a contrarian stance against the institutional crowd. The typical institutional investments include index funds, financials, energy, and emerging markets, but Cathie clearly doesn’t invest in those markets. Now, Cathie is back again with another prediction against the institutional crowd, and it just happens that she is betting almost her entire net worth on this. In fact, 85% of Ark’s top 10 cumulative holdings are literally betting on this prediction. Cathie is a long-term investor and always has 5-year price targets on her stocks. However, as an active trader, she also focuses and predicts the short-term movements of all financial assets, including stocks, cryptos, and commodities. This video will go in-depth into her bold short-term prediction for a certain sector of stocks. Welcome to Casgains Academy. If you’re new to the channel, please consider subscribing for more content like this, and let’s get right into it.
Most of us are tired of being trapped at home all day, especially after being trapped inside for so long. As a result, many of us are starting to spend money on the recovery sectors that are open. This includes eating outside, traveling around, reserving hotel rooms, and going to the movie theatre. Analysts have called the stocks involved in this space recovery stocks because sales are supposed to recover to pre-pandemic levels. On the other side of the stock market, another portion of stocks has been called “stay-at-home stocks.” The reasoning behind that is quite simple; the stay-at-home companies thrived during the pandemic. Analysts labeling these stocks as I mentioned sounds logical. However, Cathie is seeing something completely different. In her eyes, the recovery stocks won’t recover as much as analysts are predicting in the short term. On the contrary, she believes that the quote-unquote “stay-at-home” stocks have become ingrained in people’s lifestyles because they are more efficient than their old counterparts. One example of this is YouTube, which has experienced more viewership during the pandemic.
The question that we have to ask now is since restrictions during the pandemic are loosening, are you going to stop watching YouTube? Are you going to stop watching movies on your streaming services, like Netflix, Hulu, FuboTV, and Disney+? Analysts think that the answer to those questions is yes, but Cathie thinks the opposite. Many of the old counterparts of the stay-at-home stocks are not cost-efficient at all. So while short-term demand for recovery services is increasing right now, people are going to go back to online services over the long term. For example, people are now realizing that watching movies in theaters is not cost-efficient when you can just watch the same movies at home. You might argue that watching movies on the big screen is an unparalleled, unique experience, and while that may be true, I’m sure that after weighing the cost and benefits, many would prefer watching in the comfort of their homes without having to book tickets, travel, buy overpriced popcorn, and have distracting people nearby. The reason why Cathie is so confident in her prediction is that most of the stay-at-home stocks were already growing companies pre-pandemic. For one, if what I just said is true, sales of stay-at-home services are going to be substantially higher post-pandemic than analysts are predicting. The majority of analysts are predicting that stay-at-home stocks will have their growth slow down substantially in 2022. As you can see in this chart, analysts are estimating that revenue growth will fall off a cliff in 2022 after many people go back to pre-pandemic services. One of the reasons why these analysts may be off on their numbers is because of the network effect. Because many people have tried online services during the pandemic, those that enjoyed the product during the pandemic will recommend it to others. This will theoretically keep growth for the stay at home companies at relatively high levels. Another reason for Cathie’s prediction is that the innovation platforms behind the stay at home companies have hit the market share necessary for escape velocity.
In this video, I cover Cathie Wood's huge bet on the mispricing of "stay-at-home" stocks and "recovery" stocks.
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
Instagram: https://www.instagram.com/casgainsacademy/
Contact for business inquiries only: casgainsacademy @gmail.com
Cathie Wood always seems to take a contrarian stance against the institutional crowd. The typical institutional investments include index funds, financials, energy, and emerging markets, but Cathie clearly doesn’t invest in those markets. Now, Cathie is back again with another prediction against the institutional crowd, and it just happens that she is betting almost her entire net worth on this. In fact, 85% of Ark’s top 10 cumulative holdings are literally betting on this prediction. Cathie is a long-term investor and always has 5-year price targets on her stocks. However, as an active trader, she also focuses and predicts the short-term movements of all financial assets, including stocks, cryptos, and commodities. This video will go in-depth into her bold short-term prediction for a certain sector of stocks. Welcome to Casgains Academy. If you’re new to the channel, please consider subscribing for more content like this, and let’s get right into it.
Most of us are tired of being trapped at home all day, especially after being trapped inside for so long. As a result, many of us are starting to spend money on the recovery sectors that are open. This includes eating outside, traveling around, reserving hotel rooms, and going to the movie theatre. Analysts have called the stocks involved in this space recovery stocks because sales are supposed to recover to pre-pandemic levels. On the other side of the stock market, another portion of stocks has been called “stay-at-home stocks.” The reasoning behind that is quite simple; the stay-at-home companies thrived during the pandemic. Analysts labeling these stocks as I mentioned sounds logical. However, Cathie is seeing something completely different. In her eyes, the recovery stocks won’t recover as much as analysts are predicting in the short term. On the contrary, she believes that the quote-unquote “stay-at-home” stocks have become ingrained in people’s lifestyles because they are more efficient than their old counterparts. One example of this is YouTube, which has experienced more viewership during the pandemic.
The question that we have to ask now is since restrictions during the pandemic are loosening, are you going to stop watching YouTube? Are you going to stop watching movies on your streaming services, like Netflix, Hulu, FuboTV, and Disney+? Analysts think that the answer to those questions is yes, but Cathie thinks the opposite. Many of the old counterparts of the stay-at-home stocks are not cost-efficient at all. So while short-term demand for recovery services is increasing right now, people are going to go back to online services over the long term. For example, people are now realizing that watching movies in theaters is not cost-efficient when you can just watch the same movies at home. You might argue that watching movies on the big screen is an unparalleled, unique experience, and while that may be true, I’m sure that after weighing the cost and benefits, many would prefer watching in the comfort of their homes without having to book tickets, travel, buy overpriced popcorn, and have distracting people nearby. The reason why Cathie is so confident in her prediction is that most of the stay-at-home stocks were already growing companies pre-pandemic. For one, if what I just said is true, sales of stay-at-home services are going to be substantially higher post-pandemic than analysts are predicting. The majority of analysts are predicting that stay-at-home stocks will have their growth slow down substantially in 2022. As you can see in this chart, analysts are estimating that revenue growth will fall off a cliff in 2022 after many people go back to pre-pandemic services. One of the reasons why these analysts may be off on their numbers is because of the network effect. Because many people have tried online services during the pandemic, those that enjoyed the product during the pandemic will recommend it to others. This will theoretically keep growth for the stay at home companies at relatively high levels. Another reason for Cathie’s prediction is that the innovation platforms behind the stay at home companies have hit the market share necessary for escape velocity.
Many stock recommended by CASGAINS had dropped more than -60%. BEWARE OF THIS PUMP AND DUMP YOUTUBER!!!!! I lost because of CASGAINS recommendation. DON'T LISTEN TO CASCAIN.
She’s riding the Fed induced market wave! It’s a no brainer but God help her if Fed loses control!
Cathy is correct. Look how the stock market reacted during the beginning of the covid-19 pandemic. If Michael burry is lucky he'll catch a correction.
Question becomes, the world Cathie Wood's predicts will have to rely on the the lowest percentage of workers participating in the workforce to pay for these 'services' that require little capital to perpetuate but do require subscriptions to be profitable. What she is really predicting is that 20 and 30 somethings will be living with Mom and Dad like forever.
She probably thinks rates will stay low due to shit job numbers and the likely hood of another covid lockdown for short term foreseeable future.This is all favorable to high flying risk on heavy leveraged tech stocks. Why get involved with heavy regulated over burdensome China tech stocks? Makes cents to me.
the only 2 recovery stocks i believe in are theaters and some parts of real estate. imo betting against the experience of going to the movies is a bad plan.
Hi Casgain
Just out of curiosity, which is you accent?
It is killing me because it is si wildly different to the ones I know.
Is it Scotish?
Would yoy mind telling me?
🙂
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Do you have any thought of your own or is it all about Cathiiieeee wood? She’s like a guru, a magnet to all the morons out there
Just look at the valuations on her holdings. How many people are going to hold these stocks that have 5yr growth already baked in. Wait for a bear market, then we'll see if ark is worth its weight
A lot of people don't just go to the movies. They go out for dinner as well and make a night out of it
Long term is the way…the only way to beat algorithms…real transformative companies with game changing technology…find them in there Infancy and accumulate while cheap…hold 5 years or more without fear because you believe in them
she is right…I will buy Tesla for $40K USD and stay at home watching it charge..
My visits to the cinema are often spoiled by volume of sound, especially the adverts and trailers. On one occasion, sticking my fingers in my ears was not enough, I had to remove myself from the auditorium for a few minutes. One problem is that the technicians from Dolby come bustling along and calibrate the system for a full auditorium; when the cinema is half full, the sound bounces off the walls and straight into my ear-holes. Perhaps the sound is pumped up to smother the rustling, crackling, sucking and chewing.
Cathie is always looking down the road 5 years. The issue, they type of names could move down within that time frame before going higher.
the thing about movie theaters vs netflix is that 1. my popcorn is better. Anyone who doesn't believe me should come over. 2. The Local Theaters have signed behind the scenes contract with Cocacola to get a Cheaper Deal on their Soda Fountain drinks by refusing to Stock competitors products, I love Dr pepper, Pibb xtra is inedibable garbage and not an alternative at all and I'd have WATER before going to Pibb Xtra so I pretty much have to Smuggle my drinks in. 3. It is expensive. You save a lot of money at home but I think one of the biggest and best reasons for home theater is simply Subtitles are an option.
Even if a movie is my native English the Dialog in spaces is overwhelmed by the other audio and being able to read means I get most or all of it down.
So basically at home I can have the snacks I actually want, the drinks I actually want at a fraction of the cost and I can enable subtitles. Also what if I go to a movie and someone brings their kid and they start screaming in the middle of the movie?
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Of all the AMC channels – no one has mentioned that, contrary to most commentary, the hedge shorties are not sitting around paying big interest fees on their shorts, impatiently waiting for things to change. They are (I’ve said it over and over) selling in-the-money calls (naked of course) that no one, who actually bought their shares, would agree to sell so cheaply – even if their brokerage firms would let them sell naked options. They know that by shorting and shorting more and more (naked) shares during the weekly run ups to Friday at 4 PM, they can drive the stock price below their pre-determined strike. Again; for last Friday they were selling $35 calls for huge money when the stock was well over $40 – days earlier. Who, in their right mind, would buy AMC for $45, $55, or $65 – but then agree to sell out for that next Friday for $35? No one except a naked short with nothing to loose. The stock closed at $34.96. They got to keep all that money. I wrote 150 $47 calls when the stock was $37 and barely got ten grand. On the other hand, they collected ten times that much – by selling their in the money calls.
What did they do with their ten times higher gain on selling such unbelievably low strike calls – knowing they could drive the price below their already low – strike? Why not use that money to buy puts! What else would you do with millions of dollars? Any number of suckers – folks who think AMC should skyrocket – would sell puts. When you buy tons of $45 puts – when the stock is $47 – for a fairly low price – and the stock suddenly and unbelievably drops to $34.96 – how many millions more do you make? Gigantic $!
Week after profitable week they’ve been doing this. How would you feel, when gambling against some dude who everyone says is good for the money – but after he grabs all your money – you learn he had nothing – and worse – owed everyone money (or shares) on bad bets he previously made? And all this; as federal regulators cash their fat, fat paychecks week after week after year – but do nothing as you are robbed over and over and over.
And then all these cloud services are disrupted and not functioning today (July 22nd)…Thanos snap! I like a more tangible experience and one that is not so vulnerable to issues, nor so monopolized (think China).
Yet since she and a few of her friends are caught in bitcoin she has no choice but to push it.Just because she is right on a few stocks does not mean she is right on all …no one ever has been.Of course I'm taking about crypto…. it is dangerous to expose money unless it is just a bit of disposable cash you can afford to lose.Then again why would you.
Many of the "recovery" stocks are trading at all time highs. Airlines, auto-manufacturers, restaurant chains,etc.
How can these companies be worth more than they were before the pandemic?
These aren't high-growth companies and most are now trading at higher valuations while in worse financial shape. Doesn't make sense.
Once investors realise the recovery is more than priced into these companies, they'll be seeking out actual growth again. Don't let the MSM pundits scare you out of high growth stocks. the smart money will be back soon enough.
Watching movies are not about the movie 100%…. it's about getting out with your buddies. It's about having a treat, it's about making out with your girlfriend….
I don’t trust Kathie Woods with a bible in her hand. There’s just something I don’t like about her obnoxious character – another elitist who got rich during the pandemic and likes to brag about it. It’s not hard to be rich when you were born rich. I don’t trust elites like Kathie Woods or Warren Buffet. They never give you the truth. All these companies (Square, Roku, Shopify and Zoom) could lose tremendous business once everything completely reopens. This could be a complete bull trap. Buy at these prices and then have to hold at diminished prices. You’re not getting rich buying tech stocks at today’s prices. Kathie Woods is so full of herself. Never trust an elite. They are only good at getting themselves and their hedge fund investors rich because they hold secrets you don’t know.
As much as I would like to disagree with cathie she has a very proven track record and she is not usually wrong in my opinion even if she’s right her estimates are severely overblown but I am definitely putting money into some of her plays for some diversification just in case she’s right
How are historically High pe's going to rise to higher levels, to become "reasonable"? Sounds like solid 2021 logic
She picks all technology of
The Mark of TheBeast
And refers to it AS A HOLY VESSIL..mammon money gad god
OF THIS WORLD ARE THE LOST LEAD BY A MATERIALISTIC WOMAN .. Not a man
So everything needs to be done from home now. All entertainment, eating, diagnosing illness, work, shopping, etc.