Calm rational intelligently delivered. Ben you are a welcome relief to what’s normally on offer in your subject area. Whenever I see one of your videos it’s an instant watch. Did I mention the information therein is always fantastic.
Ben was saying this at the height of the Ark euphoria, when people like him were being dismissed as "boomers" or whatever. As one of those "novice investors", I'm glad I took his not-financial-advice.
So what useful advice did he give here? Because it seems like he is trying to claim credit for not investing in ARK specifically...what about all the other stocks which grew he didn't invest in? He comes across like BS artist with people like you as his cult backing up vague meaningless statements.
@@archvaldor as I understand it, he doesn't advocate stock picking. His videos tend to emphasise the objective reality that stock-pickers and active portfolio managers (e.g. Ark) will almost always underperform a cap-weighted passive global index fund over the long term.
@@ba8898 We know that.But he seems to be bragging about the fact he predicted ARKK would crash. The truth is as you say he just said avoid active portfolio managers altogether and stock-picking altogether. But then you can't claim credit for the demise of a specific stock without accepting responsibility for the all stocks you didn't invest in.
She got lucky with just about everything. Reminds me of the "everyone looks like a genius in a bull market" quote. She invested in unprofitable and volatile junk stocks during the covid bubble, when these types of stocks benefited the most from the associated stimulus. A cooler market with higher interest rates has exposed her as a charlatan who got lucky.
Uh-huh. So you and Ben Felix sold ARKK short because you were so sure she was full of it. Oh no wait you didn't....you bravely stuck the boot in when things started to get difficult after the fact.....
@archvaldor I owned arkk before it was cool in 2017. I turned 25k into 75k and sold it all around 130. It ripped a bit higher and plummeted after. I debated buying some back but never did. I might jump back in when the chart looks better. Sounds like you're still bag holding and that's OK. Happened to all of us in the early days of our investing journey.
I did a comparison (backtest) of ARKK vs. the NASDAQ 100 in the form of QQQ for Jan 2020 thru Mar 2024. For each metric: ARKK/QQQ. CAGR: 0.79%/19.65%, Max Drawdown: -77.08%/-32.58%, Beta: 1.80/1.06, Alpha: -8.96%/8.78%, Sharpe Ratio: 0.20/0.80, Sortino Ratio: 0.31/1.35. For me, the Sortino Ratio is the killer. So much unrewarded risk!
Reminds me of a good quote by Buffet: "There are three connected realities that cause investing success to breed failure. First, a good record quickly attracts a torrent of money. Second, huge sums invariably act as an anchor on investment performance: What is easy with millions, struggles with billions. Good video as usual Ben, thank u
Thanks Ben. I would just like to say that I have been watching you videos for a few years now, and you are one of the few financial RUclipsrs I trust to provide sound and unbiased investing insight. Thanks for doing what you do!
Ben, I appreciated the lesson today using ARKK as your theme. It gave me the courage to finally divest myself of some very badly performing individual stocks in my portfolio from my early days investing. I transferred the money to some low cost index funds and breathed a sigh of relief. Thanks 😊
Most of your viewers probably know, but I think it's worth highlighting that a 67 % drawdown means that you need a 200 % gain just to get back to the initial nominal value. And if the recovery takes 10+ years on average, you'd still likely be trailing more diversified investments and even savings accounts by a lot.
You say that like it isn't obvious. I have no money in ARK but the tech investments I do have I bought four years ago and plan to hold till at least 2030. It is going to be random noise till then.
Thankfully, I had no idea ARKK even existed because I've been following Ben's advice and not paying attention to financial news. Can't lose money in bad investments if you don't know they exist! Thanks Ben!
Lots of good information here. Both about our own weakness, the history of funds and the nature of economics. Thanks. As a sociopath with a sense of humour I would just like to thank all the arkk investors who lost thier nest eggs in arkk for helping fund industries a tiny few of which may very eventually make the world a better place.
I owe Ben a big thanks for his earlier video on this topic: I had bought the ARKK narrative and was about to throw caution to the wind. As usual, Ben's explanation was succinct and direct and rang true Thank you, Mr. Felix! VEQT has been a much better fit for me.
That is a kind advice and a great question we should ask ourselves about our securities at least once every year: if you did not own it today, would you buy it? Thank You!
Thank you so much for this video Ben, whenever i watch these kind of videos i can imagine Sir Jack Bogle looking at us proudly ! , fund managers and wall street hated him ! , RIP to Jack Bogle , the man who saved the common investor to have their fair share of the market!
The locust is moving on. I have seen Cathie Wood's face pop up in German-speaking personal finance YT-Channels in the past few weeks, drumming up business for her actively managed ETFs. And I do really think that she is brilliant at her job - but I also think that her job primarily is client aquisition and not really to do sensible stuff with the clients' money.
Investors who bought into ARKK at or near the peak will never see their money back in this lifetime - partly due to interest rates which make the returns on these companies much less attractive compared to cash, partly because it was a bubble fund.
The interest rates affect these companies mostly because they can’t spend that much on growth when money is so much more expensive. On the other hand, there is the equity risk premium which is normally the added return to the risk free rate that you make on stocks. The equity risk premium doesn’t necessarily change only because the interest rates change. I would never invest in the arkk etf because I don’t understand a lot of these companies and I find the mostly extremely overvalued. But to say no one can make their money back in the next 30-40 years is nothing more than speculation, as no one can predict the market nor the evolution of the economy and which companies might come out as the winners. But In my opinion it is highly unlikely as well, that the arkk will outperform the market.
Ben, I love your youtube videos and podcast. In one of your videos, you noted how many consecutive years an active manager would have to beat the market in order to reject, at the 95% confidence level, the null hypothesis that it was due to luck. Can you direct me to that video and also the paper(s) on which you based your statement? Many thanks.
I was hanging on to ARKK hoping it would go back up. Luckily not a lot of it. It's literally my smallest position. The argument that if you wouldn't buy it today, you shouldn't hold it now, is what convinced me. I'll sell out of it and buy more QQQ with that money instead.
Great video! Another interesting question to answer might be: If invested into a fund/sector that suffers a drawdown, is it beneficial to switch investments at that point? Or are the expected returns, now that the bubble deflated, more in line with the broader market? As if you bought at the top, and the price declines, you are practically starting from that lower point, whether you materialize the losses or not by switching investments.
VT (56.37%) > ARKK (-8.71%) 5-year total returns. I'll stick with global market cap-weighted indexes and factors. Innovation is already a part of global funds anyway like NVDA is 2.62% of VT already
Curiously the funds from Wood and Jacob moved pretty much the same during their recent bubble, I wouldn't have expected that from actively managed funds, but apparently that pattern of looking for disruptive tech is pretty universal.
Hi ben thanks for the amazing work you do i learned a lot from you about rational and sensible investing.. My question comes from reading about the matters in your videos Does the growing AUM affect the ability of the manager to generate positive returns especially with active approach like targeting value or size ? The short answer i read somewhere that it does
My companies largest shareholder is ark invest. My company stock has pretty much been horizontal since I started working there in 2022. Doesn't bother me too much since I get a 15% discount on it, but if not for that espp program then I would probably not want to buy our stock.
I'm not sure if I'd ever buy stock in a company I worked for. Seems like doubling the risk. Lose your job and your savings at the same time if the company goes bust. I looked at ARKG because I think biotech, as an industry, has a massive future... but I didn't know any of the companies or their business plans or really anything about them, and I didn't want to just blindly let Cathie Wood handle all of that for me. So I didn't go for it, which I'm pretty relieved about now.
@@BittermanAndy I don't disagree. Alot of my compensation comes from stock, in the form of RSU's and my 401k match is in company stock too. So I'm taking on alot more risk then is ideal.
Back when I graduated in 1999 my uncle gave me a few thousand dollars to invest in mutual funds as a high school graduation present. I piled it into the Jacob internet fund and lost 90 percent. It was a good experience though because I learned what NOT to do early on and only invest in index funds now. Also listening to rational reminder from time to time helps keep me disciplined 😂
I bought ARKK during it's dip @ $34 I figured that it would slowly recover as hype returned to tech sector; however, I sold at $46 because ARKK bought ARKB. This type of active really annoys me as ARK was double-dipping on fees.
SPX has had almost exactly the same performance over the same period (ARKK +171%, SPX +173%, both since 29 Jan 2016), and with a LOT less risk. An actively managed fund (with the fees that come with it) should be beating the S&P 500 or what's the point? Of course, almost none of them do.
Ben would like your take on collectibles as investments, I bought Booster boxes of Pokémon for $100s each and now a few years later they are worth $800 - $1000. The increase in value beats most stocks and every index fund. I know that they are not traditional and depend on popularity, but when its is popular it is very easy to double, triple your original value that you put in.
it may work with smaller amounts but its more difficult if you are unloading 25k worth of them you and also need to consider the fees trying to sell them if there isn't any local buyers
@@thanks4that261 Difference is that Pokémon is the top grossing media franchise of all time. Higher grossing than Star Wars, Harry Potter, etc. Its also been around almost 30 years, nearly establishing itself compared to Beanie Babies which got popular and was forgotten about withing a decade. Its just cardboard at the end of the day, so its speculation rather than investing, however I have made more money from Pokémon the past 10 years, than from the S&P 500. Obviously you don't spend all of your money on it, however spending $200 every three months is worth the risk for me anyways.
@@NedSchneebly-eh7kh 30 years ago nobody had any idea it'd still be around 30 years later. OK, this speculation paid off for you in the case of your Pokemon gamble, and it's your money so you do what you want, but might as well recommend going to Vegas and putting everything on red as a strategy. Possible to easily make better returns than the S&P that way. Also possible to lose everything.
Dear Ben, Thank you for the didactic and pragmatic yet valuable video. As a novice investor, I was also trained by Cathy 😱 with the help of ARRK and ARKW. I admire your work. You help improve financial literacy worldwide. You are our financial Hero. Thank you sincerely.
"Love grows old, and waxes cold, and it fades away like the morning dew" Love of money included, it loses value when inactive and that is just the way it is. The only way to know the future is to make it yourself or have control over those making it. What's the question again?
Do you have any opinions on a fund such as VGT? (Vanguard Information Technology ETF) My portfolio is sector tilted to hold about a 10% allocation in this fund. A lot of the criticism of ARKK apply here. Sector tilting being the major criticism. My personal thoughts are that VGT provides sector exposure but is also highly diversified, owning over 300 companies representing at least 12 different sub categories of the technology space (i.e. its not a futurism fund, it has a lot of nuts and bolts level practicality). I added the fund based on my personal values and beliefs more so than herding and return chasing (otherwise I might be 100% into it). Curious if there are any thoughts on tech sector tilts in general.
Hi Ben, long time podcast listener here. Happy to have found the youtube channel. Just curious Ben, have you shared how you also personally invest your own money? I am not talking about specific assets like ETF names etc but how do you approach your own investing, asset allocation etc.?
remember what Buffett said - the Wall Street professionals are in the game to make fees. These people, and Cathy Woods being one of them, talk a good game, until they have to put money on the line.
Cathy Wood did not have consistent, not to mention, stellar performance prior to running ARKK. No clue why anyone would have thought she became better of the blue.
I remember arguing with Cathie Wood fans on RUclips when ARKK was at its all-time high. The problem is that history will just repeat with the next hype stock or fund. Humans are humans and will still be susceptible to the same biases in the future.
I do find it interesting looking at ARK's old predictions and forecasts - In Jan 2019, stating that 'ARK’s autonomous taxi adoption forecast is conservative', they had autonomous vehicles coming into market by later 2019, whereas in 2024, it still remains at least a least a couple of years away. That was 'not' a conservative estimate - it was an insanely optimistic one. Given statements like that, I really don't think one can credit Woods or Ark with any real knowledge of the technology they invest in.
You said that on average, axtively managed bubble stocks that peaked in the year 2000 took 14 years to recover. Didnt the S&P 500 basically take 13 years to recover? So given that those probably fell more than the S&P from 2000 to 2002 does that mean that their returns from the bottom in 2002 to 2014 would if anything be greater?
Hi Ben - would you lump China funds (passive) into the same bucket. Also been beaten up a lot in recent years. Perhaps over exuberant a few years ago, but feels different to tech related bubbles?
Actually Cathy Wood did not perform that well even in her best days. ARKK's Sharpe Ratio did not exceed the QQQ's Sharpe Ratio. This suggests she has no stockpicking ability and was temporarily lucky on market timing.
Great job Ben. She's relocated to my hometown of St. Petersburg, Florida. The claims she makes about her expertise in Technology are laughable. I just happened to look at her fund performance year-to-date as of Tuesday, April 23, 2024. Before I saw this. She's down -12.84% for the year. And she's down -7.82% for the last five years. How can anyone lose -7.82% for the last five years? That's negative folks. I don't know… But she achieved it. How can that even be possible? And if I remember reading her materials, her goal is to have an average return of 15%. 😅 I've seen her advertising on Facebook. If I remember it was some kind of investment club type thing. If memory serves. She also uses the religious angle to gain recruits, if memory serves.
The moment arkk said that most revenue of tesla (largest position) would come from robotaxis, a technology that didn't exist when announced and still doesn't, I knew it was not a serious Fund.
Firstly, I'd like to appreciate Ben's rational and professional conduct in producing great content over the years. However, I am genuinely curious on how Ben would think about creating a content like this without a thought of if this would perhaps imply a sense that ARKK is a bad investment, as mentioned by arch or pretentiouscritic, even though he did not imply giving an advice of somehow, shorting it, to me this is one of if not one of the only Ben's flaws I've come accross with his channel. I sincerely hoped Ben would clarify to this comment about perhaps, my confusion. Thanks, Mr. Felix
@@BenFelixCSI It's not that you do not imply shorting ARKK directly Ben, I felt that if you were to put a title asking whether ARKK will recover it implies how ARKK has done badly and as archdale and pretentious critic has put it, it means that you also imply somehow knowing ARKK will do badly ex ante and you can't claim credit for the demise of ARKK without accepting the responsibility for all the other funds or individual stocks you didn't invest in
@kenwen7791 that is a false equivalence. Active managers holding concentrated portfolios in specific sectors will tend to perform poorly, even if they have some periods of high returns. That statement is true ex ante, and I said the same in another video while ARKK was still flying high. It is now clearly true ex post in this specific case. That does not mean that I am claiming to be able to pick winners, and it does not require me to make that claim for the first statement to be true.
@@BenFelixCSI Sorry if I still did not understand, but why is it a false equivalence if you are making a case in where you show you knew arkk would go down regardless of the reasons (which are valid reasons)? Is it not equivalent to as if knowing TSLA would go up and showing the however valid the reasons are that you should buy it but in reverse?
Is there any research on buzzwords/bandwagons? Like AI, metaverse and other terms most companies end up mentioning on their earning calls when they're fashionable
Most startups fail. Most startups in such difficult to excel at and extremely competitive spheres as energy, ai, biotechs etc fail even harder. Betting on the entire industry make seem like a good idea but it actually isn't, unless you chase bubbles specifically, but even then you may be late to the party without realizing it.
start buying arkk when it was 45 recurrent buy 6.88 usd everyday, after seeing this video I cancled it and dump all 300$ I have, so let's see 10 years later did sp500 did better or arkk
"Being left behind actually looks pretty good." I thought your dunking days were over, Ben 😂
Gold
Ouch..
A classy burn for sure.
i hold one share to remind me of my own hubris and Cathy's exaggerated intelligent stock picks
That’s actually very wise and also hilarious
Cathie Sloot
Cathy is actually very clever. She has made a killing from the 75 basis point fund fee. Her investors…. Not so much. Another word could be deplorable.
Calm rational intelligently delivered. Ben you are a welcome relief to what’s normally on offer in your subject area. Whenever I see one of your videos it’s an instant watch. Did I mention the information therein is always fantastic.
I appreciate that very much.
@@BenFelixCSI Interested in your thoughts on Soros's concept of reflexivity, would love if you covered it at some point.
Indeed.
Ben was saying this at the height of the Ark euphoria, when people like him were being dismissed as "boomers" or whatever. As one of those "novice investors", I'm glad I took his not-financial-advice.
So why didn't he recommend shorting the stock if he was so sure it was a bust?
@@archvaldor because here we're talking about investing, not betting
So what useful advice did he give here? Because it seems like he is trying to claim credit for not investing in ARK specifically...what about all the other stocks which grew he didn't invest in? He comes across like BS artist with people like you as his cult backing up vague meaningless statements.
@@archvaldor as I understand it, he doesn't advocate stock picking. His videos tend to emphasise the objective reality that stock-pickers and active portfolio managers (e.g. Ark) will almost always underperform a cap-weighted passive global index fund over the long term.
@@ba8898 We know that.But he seems to be bragging about the fact he predicted ARKK would crash. The truth is as you say he just said avoid active portfolio managers altogether and stock-picking altogether. But then you can't claim credit for the demise of a specific stock without accepting responsibility for the all stocks you didn't invest in.
Best channel on YT when it comes to investing. Found nothing else that even comes close to it.
Agree, along with Safeguard Wealth Management.
Plain Bagel and How Money Works are also great...
But yeah, Ben is probably the best
Agreed. And I would add Preet Banerjee to this select list.
The Rational Reminder Podcast is also pretty good 😉👍
Don't forget the Money Guy Show.
She sold nvda right at the bottom. She got lucky with tsla and that's it.
She got lucky with just about everything. Reminds me of the "everyone looks like a genius in a bull market" quote. She invested in unprofitable and volatile junk stocks during the covid bubble, when these types of stocks benefited the most from the associated stimulus.
A cooler market with higher interest rates has exposed her as a charlatan who got lucky.
Uh-huh. So you and Ben Felix sold ARKK short because you were so sure she was full of it. Oh no wait you didn't....you bravely stuck the boot in when things started to get difficult after the fact.....
@archvaldor I’ll have you know, sir, that I’ve been sticking the boot in it since before the crash.
@archvaldor I owned arkk before it was cool in 2017. I turned 25k into 75k and sold it all around 130. It ripped a bit higher and plummeted after. I debated buying some back but never did. I might jump back in when the chart looks better. Sounds like you're still bag holding and that's OK. Happened to all of us in the early days of our investing journey.
@@archvaldor You should probably fact check yourself before you put that boot in your mouth lol
I did a comparison (backtest) of ARKK vs. the NASDAQ 100 in the form of QQQ for Jan 2020 thru Mar 2024. For each metric: ARKK/QQQ. CAGR: 0.79%/19.65%, Max Drawdown: -77.08%/-32.58%, Beta: 1.80/1.06, Alpha: -8.96%/8.78%, Sharpe Ratio: 0.20/0.80, Sortino Ratio: 0.31/1.35. For me, the Sortino Ratio is the killer. So much unrewarded risk!
i approve of this slight shift in direction for the channel
Reminds me of a good quote by Buffet: "There are three connected realities that cause investing success to breed failure. First, a good record quickly attracts a torrent of money. Second, huge sums invariably act as an anchor on investment performance: What is easy with millions, struggles with billions. Good video as usual Ben, thank u
This is genuinely great - what's the third condition (or is that the millions vs billions part)?
I'm betting on ARKK
... going down
That is called SARK
you mean that ARK will .. sink ?
Thanks Ben. I would just like to say that I have been watching you videos for a few years now, and you are one of the few financial RUclipsrs I trust to provide sound and unbiased investing insight. Thanks for doing what you do!
Ben, I appreciated the lesson today using ARKK as your theme. It gave me the courage to finally divest myself of some very badly performing individual stocks in my portfolio from my early days investing. I transferred the money to some low cost index funds and breathed a sigh of relief. Thanks 😊
Most of your viewers probably know, but I think it's worth highlighting that a 67 % drawdown means that you need a 200 % gain just to get back to the initial nominal value. And if the recovery takes 10+ years on average, you'd still likely be trailing more diversified investments and even savings accounts by a lot.
You say that like it isn't obvious. I have no money in ARK but the tech investments I do have I bought four years ago and plan to hold till at least 2030. It is going to be random noise till then.
@@archvaldor Ben might be all wrong. Maybe your tech picks will be lucky. And you'll win!! Good luck!
Thankfully, I had no idea ARKK even existed because I've been following Ben's advice and not paying attention to financial news. Can't lose money in bad investments if you don't know they exist! Thanks Ben!
Lots of good information here. Both about our own weakness, the history of funds and the nature of economics. Thanks. As a sociopath with a sense of humour I would just like to thank all the arkk investors who lost thier nest eggs in arkk for helping fund industries a tiny few of which may very eventually make the world a better place.
I owe Ben a big thanks for his earlier video on this topic: I had bought the ARKK narrative and was about to throw caution to the wind. As usual, Ben's explanation was succinct and direct and rang true
Thank you, Mr. Felix! VEQT has been a much better fit for me.
That is a kind advice and a great question we should ask ourselves about our securities at least once every year: if you did not own it today, would you buy it? Thank You!
Thank you so much for this video Ben, whenever i watch these kind of videos i can imagine Sir Jack Bogle looking at us proudly ! , fund managers and wall street hated him ! , RIP to Jack Bogle , the man who saved the common investor to have their fair share of the market!
The locust is moving on. I have seen Cathie Wood's face pop up in German-speaking personal finance YT-Channels in the past few weeks, drumming up business for her actively managed ETFs. And I do really think that she is brilliant at her job - but I also think that her job primarily is client aquisition and not really to do sensible stuff with the clients' money.
Investors who bought into ARKK at or near the peak will never see their money back in this lifetime - partly due to interest rates which make the returns on these companies much less attractive compared to cash, partly because it was a bubble fund.
The interest rates affect these companies mostly because they can’t spend that much on growth when money is so much more expensive. On the other hand, there is the equity risk premium which is normally the added return to the risk free rate that you make on stocks. The equity risk premium doesn’t necessarily change only because the interest rates change. I would never invest in the arkk etf because I don’t understand a lot of these companies and I find the mostly extremely overvalued. But to say no one can make their money back in the next 30-40 years is nothing more than speculation, as no one can predict the market nor the evolution of the economy and which companies might come out as the winners. But In my opinion it is highly unlikely as well, that the arkk will outperform the market.
Excellent post Ben. Definitely will check out your other videos.
Just invest in a passively managed growth fund or etf. Ben you have taught me well!
Vanguard ETFs here, they do well.
Ben, I love your youtube videos and podcast. In one of your videos, you noted how many consecutive years an active manager would have to beat the market in order to reject, at the 95% confidence level, the null hypothesis that it was due to luck. Can you direct me to that video and also the paper(s) on which you based your statement? Many thanks.
Cathie Wood always had poor investing theories.
Listening to her talking about Tesla makes me wonder why she isn't weaving baskets in a nice safe and secure garden on a warm spring day.
@@davidbrayshaw3529why are you short Tesla?
I'm still a novice, but I know for certain if you heard about it in the news, you are too late.
Or a Motley Fool article
@@Will140f Yea, you gotta find the opportunities on your own. Its easy to analyze it if its given to you.
Not necessarily. There were news about Apple in the 70s. Just don't invest _because_ you heard about it in the news.
@ironcito1101 good point!
@@ironcito1101 thanks for the tip
I was hanging on to ARKK hoping it would go back up. Luckily not a lot of it. It's literally my smallest position. The argument that if you wouldn't buy it today, you shouldn't hold it now, is what convinced me. I'll sell out of it and buy more QQQ with that money instead.
Another great video Ben, any chance you can post a list of the books on your shelf?
As always Ben, your the diamond in this coal mine. We hold onto our losses and sell our winners quickly.
Great video! Another interesting question to answer might be: If invested into a fund/sector that suffers a drawdown, is it beneficial to switch investments at that point? Or are the expected returns, now that the bubble deflated, more in line with the broader market? As if you bought at the top, and the price declines, you are practically starting from that lower point, whether you materialize the losses or not by switching investments.
The high ARK fees and fractional costs of continual trading really add up 😢
Or you’re just a cheap ass
I'd rather stick with Vanguard's ETFs and their much lower expense ratios.
Finally someone did this, thanks Ben
You've made very good point. Love your video. If you and your company would provide advising for people in US, I would 100% schedule a time with you.
the technology bubble thtough history rant is so good!
VT (56.37%) > ARKK (-8.71%) 5-year total returns. I'll stick with global market cap-weighted indexes and factors. Innovation is already a part of global funds anyway like NVDA is 2.62% of VT already
The funny part was I’m pretty sure I remember her making an ad dunking on index funds. 😂
NVDA is likely a bubble by itself
Great work Ben. However, I miss your previous theme of saffron and green joints. Bring that back please.
Absolutely love those rational analyses
Interessting!
Curiously the funds from Wood and Jacob moved pretty much the same during their recent bubble, I wouldn't have expected that from actively managed funds, but apparently that pattern of looking for disruptive tech is pretty universal.
Hi Ben, I see that Dimensional ETFs are available on the the NYSE ARCA exchange. Would it make sense to invest in these? If so, which ones?
Hi ben thanks for the amazing work you do i learned a lot from you about rational and sensible investing..
My question comes from reading about the matters in your videos
Does the growing AUM affect the ability of the manager to generate positive returns especially with active approach like targeting value or size ?
The short answer i read somewhere that it does
Yes there are a bunch of good papers on this. It’s diminishing returns to scale for active management.
My companies largest shareholder is ark invest. My company stock has pretty much been horizontal since I started working there in 2022. Doesn't bother me too much since I get a 15% discount on it, but if not for that espp program then I would probably not want to buy our stock.
Is the company profitable?
@samsonsoturian6013 No, not particularly. Though we are probably doing better than a lot of biotech firms right now.
I'm not sure if I'd ever buy stock in a company I worked for. Seems like doubling the risk. Lose your job and your savings at the same time if the company goes bust.
I looked at ARKG because I think biotech, as an industry, has a massive future... but I didn't know any of the companies or their business plans or really anything about them, and I didn't want to just blindly let Cathie Wood handle all of that for me. So I didn't go for it, which I'm pretty relieved about now.
@@BittermanAndy I don't disagree. Alot of my compensation comes from stock, in the form of RSU's and my 401k match is in company stock too. So I'm taking on alot more risk then is ideal.
Back when I graduated in 1999 my uncle gave me a few thousand dollars to invest in mutual funds as a high school graduation present. I piled it into the Jacob internet fund and lost 90 percent. It was a good experience though because I learned what NOT to do early on and only invest in index funds now. Also listening to rational reminder from time to time helps keep me disciplined 😂
I bought ARKK during it's dip @ $34 I figured that it would slowly recover as hype returned to tech sector; however, I sold at $46 because ARKK bought ARKB. This type of active really annoys me as ARK was double-dipping on fees.
Aside from the bubble, ARRK's return from January 2016 to now has been great - almost a triple.
SPX has had almost exactly the same performance over the same period (ARKK +171%, SPX +173%, both since 29 Jan 2016), and with a LOT less risk.
An actively managed fund (with the fees that come with it) should be beating the S&P 500 or what's the point? Of course, almost none of them do.
Thank you)
Ben would like your take on collectibles as investments, I bought Booster boxes of Pokémon for $100s each and now a few years later they are worth $800 - $1000. The increase in value beats most stocks and every index fund.
I know that they are not traditional and depend on popularity, but when its is popular it is very easy to double, triple your original value that you put in.
it may work with smaller amounts but its more difficult if you are unloading 25k worth of them you and also need to consider the fees trying to sell them if there isn't any local buyers
Ask the people who bought rare and valuable beanie babies and kept them in a protective case because it was their retirement plan.
@@thanks4that261 Difference is that Pokémon is the top grossing media franchise of all time. Higher grossing than Star Wars, Harry Potter, etc.
Its also been around almost 30 years, nearly establishing itself compared to Beanie Babies which got popular and was forgotten about withing a decade.
Its just cardboard at the end of the day, so its speculation rather than investing, however I have made more money from Pokémon the past 10 years, than from the S&P 500.
Obviously you don't spend all of your money on it, however spending $200 every three months is worth the risk for me anyways.
@@NedSchneebly-eh7kh 30 years ago nobody had any idea it'd still be around 30 years later.
OK, this speculation paid off for you in the case of your Pokemon gamble, and it's your money so you do what you want, but might as well recommend going to Vegas and putting everything on red as a strategy. Possible to easily make better returns than the S&P that way. Also possible to lose everything.
@@BittermanAndy Almost all of my net worth is in index funds. However I spend a small percentage of my money on speculative things.
Cathy's place in the annals of investing history is assured. What is happening today will be discussed for decades.
Is stis rationale applicable only to active investing? Or would be also applicable to passively investing in something very tech heavy like QQQ?
Dear Ben, Thank you for the didactic and pragmatic yet valuable video. As a novice investor, I was also trained by Cathy 😱 with the help of ARRK and ARKW. I admire your work. You help improve financial literacy worldwide. You are our financial Hero. Thank you sincerely.
Babe wakeup new Ben Felix video
Ark invest rode the Tesla stock overvaluation and the rest of the portfolio stocks are mediocre. The market corrected and history repeats itself.
Hi Ben, can you do a video on the Nasdaq and incorporating it into a portfolio?
"Love grows old, and waxes cold, and it fades away like the morning dew"
Love of money included, it loses value when inactive and that is just the way it is.
The only way to know the future is to make it yourself or have control over those making it. What's the question again?
Haha, I thought you said destructive innovation for a second. Sounds about right as it was pretty destructive to a holders portfolio
Do you have any opinions on a fund such as VGT? (Vanguard Information Technology ETF) My portfolio is sector tilted to hold about a 10% allocation in this fund. A lot of the criticism of ARKK apply here. Sector tilting being the major criticism. My personal thoughts are that VGT provides sector exposure but is also highly diversified, owning over 300 companies representing at least 12 different sub categories of the technology space (i.e. its not a futurism fund, it has a lot of nuts and bolts level practicality). I added the fund based on my personal values and beliefs more so than herding and return chasing (otherwise I might be 100% into it).
Curious if there are any thoughts on tech sector tilts in general.
Hi Ben, long time podcast listener here. Happy to have found the youtube channel. Just curious Ben, have you shared how you also personally invest your own money? I am not talking about specific assets like ETF names etc but how do you approach your own investing, asset allocation etc.?
Yes.
Five Factor Investing with ETFs
ruclips.net/video/jKWbW7Wgm0w/видео.html
I have 100 shares at 90 a share, should i cut loses
Please create a video on analyst recommendations and returns. Thank you!
remember what Buffett said - the Wall Street professionals are in the game to make fees. These people, and Cathy Woods being one of them, talk a good game, until they have to put money on the line.
Investing in the Future, stick with the good old NASDAQ 100 ETF 🙌🚀
Cathy Wood did not have consistent, not to mention, stellar performance prior to running ARKK. No clue why anyone would have thought she became better of the blue.
I remember arguing with Cathie Wood fans on RUclips when ARKK was at its all-time high.
The problem is that history will just repeat with the next hype stock or fund. Humans are humans and will still be susceptible to the same biases in the future.
Cathy is waiting for you outside your house LOL
Lol
This begets a new phrase... "All ARKK and no bite"
Thanks Ben.
It's called 'destructive' innovation for a reason
Ben pls make a video on DCPP VS DBPP
TL;DR summary - hell no
😂
This isn't about tech--XLK is doing just fine, thank you. This is about actively managed funds and selling at the bottom.
Fine for now. P/E way above market.
That's not significantly different enough from SPY to make any argument.
I do find it interesting looking at ARK's old predictions and forecasts - In Jan 2019, stating that 'ARK’s autonomous taxi adoption forecast is conservative', they had autonomous vehicles coming into market by later 2019, whereas in 2024, it still remains at least a least a couple of years away.
That was 'not' a conservative estimate - it was an insanely optimistic one.
Given statements like that, I really don't think one can credit Woods or Ark with any real knowledge of the technology they invest in.
Cathie should change the fund ticker to AIRK, guaranteed comeback... until the AI bubble bursts as well.
You said that on average, axtively managed bubble stocks that peaked in the year 2000 took 14 years to recover. Didnt the S&P 500 basically take 13 years to recover? So given that those probably fell more than the S&P from 2000 to 2002 does that mean that their returns from the bottom in 2002 to 2014 would if anything be greater?
ARKK will recover around 2030, but the charges are very high per annum.
So, if a company was a market disrupter in 2020, why isn’t a disrupter in 2024?
So what you're saying is that us bagholders have no exit out now? WTF?!
@BenFelix Do you think that AI being mainly developed in the US makes a compelling enough case to practically avoid US Ex stocks?
I don’t think so. Asset prices reflect all that potential already.
Should you buy XSP or VFV right now?
Thanks 🎉
Hi Ben - would you lump China funds (passive) into the same bucket. Also been beaten up a lot in recent years. Perhaps over exuberant a few years ago, but feels different to tech related bubbles?
Similar story regarding economic growth vs returns.
after she bought a COIN for 250 and almost immediately sold it for 60, I generally doubt that it is adequate
I’m down 60% or so. Bought at ATH. 😢
Reading these comments in tears as i hold 2.5k investment down from 7kUSD with 70% loss 😭
Actually Cathy Wood did not perform that well even in her best days. ARKK's Sharpe Ratio did not exceed the QQQ's Sharpe Ratio. This suggests she has no stockpicking ability and was temporarily lucky on market timing.
I got lucky, rode it it from $85 to about $110 and got out.
Rational reminder community signup seems to be broken :(
Great job Ben. She's relocated to my hometown of St. Petersburg, Florida. The claims she makes about her expertise in Technology are laughable. I just happened to look at her fund performance year-to-date as of Tuesday, April 23, 2024. Before I saw this. She's down -12.84% for the year. And she's down -7.82% for the last five years. How can anyone lose -7.82% for the last five years? That's negative folks.
I don't know… But she achieved it. How can that even be possible?
And if I remember reading her materials, her goal is to have an average return of 15%. 😅
I've seen her advertising on Facebook. If I remember it was some kind of investment club type thing. If memory serves.
She also uses the religious angle to gain recruits, if memory serves.
Let's say I'm wrong but ARKK can not see ATH again in Cathie wood own life. If someone bought TQQQ 3X more risky but TQQQ did better on chart.
Potentially prescient video vis a vis the AI boom. Time will tell but most AI companies will probably crash out. Good video.
The moment arkk said that most revenue of tesla (largest position) would come from robotaxis, a technology that didn't exist when announced and still doesn't, I knew it was not a serious Fund.
I'm so curious as to what is Ben Felix's personnal portfolio.
www.dimensional.com/ca-en/funds/dfa607/global-equity-portfolio-f
4:30 XXXX just released about a month ago, supposedly the first 4x daily bull ETF for the S&P500, def a sign we're heading for a downturn.
4x wow. Great ticker too.
There's been a 3X for years, but all the hype is over chips and AI
Firstly, I'd like to appreciate Ben's rational and professional conduct in producing great content over the years. However, I am genuinely curious on how Ben would think about creating a content like this without a thought of if this would perhaps imply a sense that ARKK is a bad investment, as mentioned by arch or pretentiouscritic, even though he did not imply giving an advice of somehow, shorting it, to me this is one of if not one of the only Ben's flaws I've come accross with his channel. I sincerely hoped Ben would clarify to this comment about perhaps, my confusion.
Thanks, Mr. Felix
Are you asking why I don’t advise shorting things that I call bad investments?
@@BenFelixCSI It's not that you do not imply shorting ARKK directly Ben, I felt that if you were to put a title asking whether ARKK will recover it implies how ARKK has done badly and as archdale and pretentious critic has put it, it means that you also imply somehow knowing ARKK will do badly ex ante and you can't claim credit for the demise of ARKK without accepting the responsibility for all the other funds or individual stocks you didn't invest in
@kenwen7791 that is a false equivalence.
Active managers holding concentrated portfolios in specific sectors will tend to perform poorly, even if they have some periods of high returns.
That statement is true ex ante, and I said the same in another video while ARKK was still flying high. It is now clearly true ex post in this specific case.
That does not mean that I am claiming to be able to pick winners, and it does not require me to make that claim for the first statement to be true.
@@BenFelixCSI Sorry if I still did not understand, but why is it a false equivalence if you are making a case in where you show you knew arkk would go down regardless of the reasons (which are valid reasons)? Is it not equivalent to as if knowing TSLA would go up and showing the however valid the reasons are that you should buy it but in reverse?
great insight! thank you
Is there any research on buzzwords/bandwagons? Like AI, metaverse and other terms most companies end up mentioning on their earning calls when they're fashionable
Yes there are a few papers on this in the listed references.
@@BenFelixCSIthanks, and thanks for all your content! ❤
Most startups fail. Most startups in such difficult to excel at and extremely competitive spheres as energy, ai, biotechs etc fail even harder. Betting on the entire industry make seem like a good idea but it actually isn't, unless you chase bubbles specifically, but even then you may be late to the party without realizing it.
“ if we’re right and I think we are” got old
Which paper is this formula mentioned 3:52, unable to find it.
It's a standard valuation equation. You can see it in this paper. www.sciencedirect.com/science/article/abs/pii/S0304405X14002323
@@BenFelixCSI thank you very much
In the 50s, any company with the word "troncs" in it had the same thing too
start buying arkk when it was 45 recurrent buy 6.88 usd everyday, after seeing this video I cancled it and dump all 300$ I have, so let's see 10 years later did sp500 did better or arkk
😂
Don’t get why with this past year’s run on AI that the ETF isn’t booming.