Katie Wood is the woman who conquered Wall Street and her investment strategies

A female investor who achieved success when she was well over 50 is an atypical example in the financial sphere. However, contrary to prejudice, Katie Wood managed to conquer the world of investment. Capital holders often wonder what Katie Wood’s portfolio is, where her ARKInvest fund invests and what financial management strategy this successful woman adheres to.

Investor Katie (Catherine) Wood: Who is this

Catherine is the daughter of Irish immigrants, was born in the USA in Los Angeles in 1955. After graduating from a private Catholic school, Wood enrolled at the University of Southern California and graduated with honors in 1981. Her specialization was economics and finance, and her teacher and mentor was the famous economist and writer Arthur Laffer.

Catherine’s career path, connected exclusively with the financial sphere, turned out to be very successful, but unexpectedly ended at the age of 57, when Wood decided to go into free swimming and founded her own company.

Catherine Wood’s Career

While still a student, Catherine, with the support of Laffer, got a job as an assistant economist at Capital Group. In 1980, she moved to New York and worked there at Johnson Associates for 18 years. During this time, Wood managed to work as a chief economist and analyst, later became a portfolio manager and eventually took the position of managing director. In 1998, the future well-known investor co-founded the Tupelo Capital Services hedge fund.

Katie’s further career is connected with AllianceBernstein, where she worked as an investment director until 2013. One of her ideas was to create an ETF fund, but this idea did not find support among colleagues and the company’s management.

The reason for this was the deterioration of AllianceBernstein’s indicators during the economic crisis of 2007-2008.

Unable to find like-minded people, Katie Wood leaves a prestigious well-paid job, and subsequently creates her own foundation. At that time, being at the age of 57, Wood made a fateful decision for herself, not being afraid of the condemnation of peers and ridicule from successful investors.

The Birth of ARK Invest

ARK Invest is the brainchild of Catherine Wood, an investment company founded by her on personal savings after leaving AllianceBernstein. It is noteworthy that the foundation received its name in honor of the Christian religious shrine – the ark.

This corresponds to the main idea of the company – the support of promising areas.

The first three years were unsuccessful for the company. During this period, Catherine had to sell large blocks of shares, but this helped the fund to stay afloat. In the following years, the situation improved, and already in 2017, the company’s capital increased 10 times. Now 51% of the securities in the portfolio belong to Katie Wood herself, 10% to the fund’s employees and 39% are owned by other investors.

ARK Invest was really seriously talked about after the stock price of such companies as Netflix, Square, Illumina, Athenahealth sharply increased in 2017. All these companies are engaged in the development and implementation of advanced technologies in various fields, and all of them, according to Catherine Wood’s forecasts, had to go up.

It is worth noting that Catherine’s investment forecasts often come true. So, in 2018, after Elon Musk’s statement about his intention to make Tesla a closed company, Wood JSC appealed to the board of directors with a statement about the imminent increase in the value of shares. And in August 2020, this statement was confirmed when the price per share reached $ 800.

In 2018, the American business magazine Bloomberg included Wood in the list of the top 50 most influential people who determine the development of global business.

Today, Catherine Wood is not only a mother of three children and the founder of a successful company, but also a guiding star in the world of investments for many novice players in this market. In addition to managing the fund’s assets, Katherine and her team are constantly in contact with the public, including giving interviews, filming videos, holding Zoom conferences, as well as publicly posting forecasts, calculations and research. Following the main idea, Catherine replenishes the company’s staff with young specialists in the field of genetics and engineering.

Asset composition and ARK Invest strategy

In addition to the fact that Wood is an ardent Tesla fan and predicts a great future for her, the female investor actively supports innovative areas: artificial intelligence, robotics, blockchain, energy storage, DNA sequencing, autonomous travel and others.

And even the recent drop in the value of technology companies’ shares has not dampened Wood’s optimism. On the contrary, she announced the acquisition of even more shares of similar companies. Recent major investments that have replenished ARK Invest’s portfolio include shares in Roblox (a gaming platform), as well as DraftKings (a sports betting company).

Catherine Wood’s rather aggressive and risky investment strategy is based on the belief in the prospects of breakthrough technologies. ARK Invest experts find companies capable of meeting fundamentally new needs of humanity, which, according to Wood, will grow and develop by analogy with electricity, telephone and car. The latter, by the way, for the beginning of the XX century were an example of advanced technologies with a great future.

It is also important to mention one of the main principles of ARK Invest – the principle of openness, thanks to which everyone can get acquainted with the work of the company, its ideas and forecasts.

In conclusion, we note the most sensational forecasts of Catherine:

• back in 2018, Wood predicted an increase in the value of Tesla shares and already in 2020 this forecast was justified;
• in 2015, Wood started buying cryptocurrency. At that time, bitcoin was worth $250 apiece. This asset has become one of the key assets in the company’s portfolio. Catherine suggested that its value will increase to $ 500, and in the future digital currencies will replace bonds in the classic portfolio.

As we can see, this forecast was fully justified. The cost of bitcoin has increased significantly, and cryptocurrencies occupy an increasing part in the portfolios of investors.

Published: 30 April, 2022