Home » How Cathie Wood Gave Back All of Her Gains

How Cathie Wood Gave Back All of Her Gains

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.

Weekly Chart of ARK Innovation ETF (ARKK) — Source: TradingView

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…

Cathie Wood’s Teladoc Health, Inc. (TDOC) Holding History — Source: GuruFocus.com

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…

Weekly Chart of Teladoc Health, Inc. (TDOC) with Four Stages — Source: TradingView

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.

I’ll be talking more about how I use stocks and options to profit from corporate insider activity in a special LIVE session today at 12:00 p.m. EST.

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.

Just click here to register and reserve your seat for this special Insider Effect presentation today at 12:00 p.m. EST.

I look forward to seeing you there!

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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