Oh, Cathie. When will you learn?
Every day, I am shocked by the trust investors put in awful investment managers.
Cathie Wood, CEO of ARK Invest, manages $24 billion in her ARK Innovation ETF (ARKK).
The fund is down 70% from last year’s high.
And it is easy to see why…
Cathie doesn’t understand the Four Stages of the Stock Cycle.
As a reminder, the cycle is made up of four distinct stages…
- Stage 1: Consolidation
- Stage 2: Accumulation
- Stage 3: Distribution
- Stage 4: Capitulation
If she understood these, she wouldn’t be buying stocks in downtrends…
She wouldn’t be adding to her losers…
And she wouldn’t be burning up all her investors’ money!
Unhealthy Trading
Take Teladoc Health, Inc. (TDOC), for example. It is her second-largest holding.
She began buying when the stock was trending higher.
But as it began to fall, she kept adding… and adding… and adding…
The more the stock fell, the more she bought.
She was buying TDOC hand-over-fist near $200 per share.
A year later, the stock trades for $29.
And she’s still holding!
Teladoc is a textbook example of the Four Stages of the Stock Cycle and why you should only buy in Stage 2.
This image shows the four stages of TDOC and where Cathie was buying…
I’m sure Ms. Wood is a decent analyst.
And this company (along with the other dogs in her portfolio) are probably doing exciting things.
But the value of a stock is driven by supply and demand.
If the issue is not in demand, price will fall. And every investor has to respect that.
With that in mind, it seems Cathie Wood knows nothing about risk management.
And her investors are paying the price for her ego.
Follow the Real Insiders
Now, as you can tell, you shouldn’t always follow the advice of someone who’s playing with other investors’ money.
But when corporate insiders like CEOs, CFOs, executives and board members put down their own hard-earned money to buy shares of their own companies, it’s a huge vote of confidence.
After all, these folks have a footing of knowledge about their companies that Main Street investors simply do not.
It’s absolutely free to attend, so I really hope you’ll join me.
I’ll cover my strategy for trading alongside corporate insiders and generating potentially massive gains with less risk.
I look forward to seeing you there!
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
