Technology is permeating every industry and blurring the lines between them, making traditional sector-based research obsolete. Wood advocates for structuring investment research departments around foundational technologies like AI, robotics, and blockchain to accurately analyze future growth drivers.
Contrary to typical risk-off strategies, ARK Invest manages risk by concentrating its portfolio into its highest-conviction names during market downturns. Conversely, during bull markets, as opportunities like IPOs increase, the firm diversifies its holdings to capture broader upside.
ARK's forecast for explosive growth is not just about multiple innovation platforms, but their convergence. Each platform (robotics, AI, energy storage) is on its own S-curve of adoption. When they combine, as in autonomous vehicles, their S-curves feed each other, creating a powerful multiplier effect that accelerates growth exponentially.
Wood calls current accredited investor laws, which restrict private market access based on wealth, "un-American." She argues it's illogical when anyone can buy lottery tickets. Her proposed solution is a simple knowledge-based test on diversification and asset classes to democratize access to venture-style investments for retail investors.
Citing the court's decision to override Tesla shareholders on Elon Musk's pay package, Cathie Wood identifies Delaware's legal environment as unpredictable. Revealing that her own firm is moving its incorporation out of the state, she highlights an emerging, significant risk for companies that have long considered Delaware the safest legal home.