The Art Of Explaining Away Underperformance

Cathie Wood is not a new topic on this blog. I have written about Wood and ARK Invest plenty of times over the years, largely because I remain fascinated by the seemingly endless free pass she gets from the financial media despite underperforming tech indexes and what I believe are batshit insane price targets she has become known for setting on companies.

Yet Wood routinely appears on financial television and has spent years being treated as something of a tech stock oracle for being the right place at the right time when Tesla stock somehow spiked more than 10x in a year heading into the Covid pandemic. I give Wood credit for that call…the numbers don’t lie.

I also give Wood credit for her on-air charisma, the relationship she has built with media and retail investors, and the financial success she has amassed for herself.

You can see Wood’s year/two years of brilliance in the chart below. It’s the big spike in the purple line where ARKK outpaces the NASDAQ between 2020 and 2022.

You can also see that heading out of 2022, compared to the NASDAQ, Wood’s Flagship fund beefed it hard and has significantly trailed the tech index. Now, dating back to January 1, 2019, Wood has underperformed the NASDAQ ETF by about -249%.

Yet the TV appearances and undying adulation for Wood in financial media hasn’t stopped. Nor has Wood been called out for this underperformance by anyone other than Morningstar, who estimated in 2024 that ARK had destroyed approximately $14 billion in investor capital and listed Wood as one of the top 15 funds that have destroyed the most wealth over the past decade...(READ THIS FULL ARTICLE 100% FREE HERE).

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