“A Boom or Bust Investor”

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At the risk of beating a dead horse, I can’t help but link our readers to a recent Financial Times article titled “Ark Invest CEO Cathie Wood on everything from deflation to Elon Musk.” 

In the spirit of Ms. Wood’s faith, I feel confident in saying that you are truly blessed to be part of the rational side of the business with Equius and Dimensional Fund Advisors on your side. At least in this context, science is clearly winning. 

Before I share some favorite quotes from the FT article, I’ll share another perspective from the March 17 issue of the Wall Street Journal (Stock Pickers Watched the S&P 500 Pass Them by Again in 2021). 

Small value stocks performed even better than the large growth stock index, with the DFA US Small Cap Value fund (the best proxy for small value stocks) up 39.8% last year. With ARKK down 23.4% in 2021, the spread between what Ms. Wood now calls a “deep value portfolio” and the DFA fund was a whopping 63.2%. 

This begs the question of whether you would rather own really expensive growth stocks before they become value stocks (from falling prices) or low-priced value stocks before they become growth stocks (from rising prices). 

What others are saying about Wood 

A prominent venture capitalist: “…[T]he difficulty she has is that she believes in stories. Sometimes you have to disassociate the story from the business model and valuations.” 

A top executive at a multitrillion-dollar asset manager: “She tells a whole story that’s almost impervious to facts.” 

A short seller who is on the opposite side of many of Wood’s trades: “Every bull market has its geniuses who buy the hottest, most aggressive stocks [that] go up more than the market. But the downside of this stuff is just as spectacular as the upside. We saw this in the dotcom era.” 

The chief investment officer of Morgan Stanley Wealth Management: “Cathie’s a boom or bust investor because she doesn’t disinvest or risk manage.” 

A Goldman Sachs partner (an admirer!): “Regardless of performance trends, it’s clear that Cathie is disrupting the asset management industry in order to capture the imagination of a new generation of investors. She has demonstrated great respect for the retail investor by democratizing access to information.” 

My god, what a load of rubbish. Those two sentences tell you all you need to know about traditional Wall Street and what they think of you. 

Thinking of Mary

I was raised by another faith-full Catholic in a family of seven children (six boys, one girl). Although I’m sure she could have done anything she wanted in life, my mom decided to be a stay-at-home mother—one of the most noble and valuable professions in the world. She was smart, strong, and loving. Our home was the most popular hangout for all my friends and family when we were growing up. I had a special relationship with my mom, and she taught me—along with so much more—the value and richness of honesty and hard work.* 

From two of my long-time childhood friends: 

“She was a great woman. I always considered her a second mom to me.” 

“Second mom to me too. She was so kind to me. Always welcome in her home day or night. Never an unkind word to me EVER. This breaks my heart.” 

My mom passed away peacefully this week on St. Patrick’s Day at age 88—fitting, given that her seventh child and my youngest brother, Patrick, died when he was 6 years old. As crushing as that loss was, she stayed strong for her kids and grandkids for the rest of her life. I’m sure she’s with Patrick once again. I’ll miss her dearly. Rest in peace, Mary Zollinger Troutner. 

*I must have been about 14 when I woke at 4:30 one morning to begin my paper route. Doubled over in pain, I knocked on my parents’ bedroom door and told my dad I couldn’t do it. Believing I had indigestion (or simply wanted more sleep!), he reluctantly went with me. We delivered every paper, and then drove to the hospital to have my infected appendix removed. Humbled him a bit. A fine Midwestern upbringing that was. 

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