Invest Like The Best
Episode 97 Investing in Innovation
Invest Like The Best

Episode 97: Investing in Innovation

Investing in Innovation

Cathie Wood is the founder of ARK Invest. We cover why disruptive innovation is so inefficiently priced in today's public markets, the 5 technologies that ARK believes will be the most disruptive, and how she grew ARK to over $6B+ AUM.

This episode is brought to you by:

CFA Institute. CFA Institute is a global association of investment professionals, whose mission is to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. CFA Institute serves a global community of investment professionals working to build an investment industry where investor's interests come first, financial markets function at their best and economies grow. The Chartered Financial Analyst credential is the most respected and recognized investment management designation in the world. The views expressed in this podcast do not necessarily represent the views of CFA Institute.

[00:02:30] – (First Question) – Cathie’s idea of bringing open source to Wall Street

[00:04:47] – Deep dive into the platform

[00:06:09] – White Paper on Bitcoin – Could Bitoin serve as the role of money

[00:07:43] – Why disruptive innovation is so inefficiently priced

[00:10:04] – How well does the market discount cash flow of disruptive businesses

[00:14:09] – A look at their investing strategies, starting with top-down.

[00:16:10] – How they picked their 5 categories of technological change, starting with foundational

[00:19:42] – Changes in energy

[00:21:53] – Robotics

[00:24:17] – Excitement over deep learning

[00:28:03] – How they express their top-down ideas from the bottom up

[00:36:06] – Mobility as a service as a key area of focus

[00:45:25] – The power of public mistakes

[00:46:39] – What she looks for when hiring

[00:51:14] – her philosophy on building and maintain a portfolio

[00:56:38] – Behind the growth of the company

[01:04:01] – Most exciting area for her right now

[01:07:52] – Kindest thing anyone has done for Cathie

Investing in Innovation

Introduction

Patrick
My guest this week is Cathie Wood, the founder of ARK Invest. Cathie and her team believe that disruptive innovation is the key to long term growth and therefore, alpha in public markets. Because their style of investing is entirely contingent on what will happen and change in the future, it is about as different a style as exists from the quantitative approach to investing, which relies on what is currently knowable about stocks and businesses. The future is notoriously hard to predict, so I'm always interested to hear about investing approaches which try to model and handicap the future and build portfolios against that work. In this conversation, we explore all the most interesting and exciting technology trends at play in the world today, and how those trends may play out for investors. We discuss genome sequencing, blockchain, software 2.0, mobility as a service, automation, and more. We also discuss Cathie's take on building a bridge between the worlds of finance and Silicon Valley, and why starting with a benchmark is anathema to their process. It's hard to deny Cathie's passion and enthusiasm, and I credit her for building a unique firm culture that emphasizes openness and collaboration. Please enjoy our conversation on investing in innovation.

Power of Open Source Mentality

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