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    ARK’s stock picks still look extremely expensive . . . 

    This year was a bad start for tech stocks.

    Nasdaq Composite Index on the first 5 trading days of 2021 Lost 4.5 percent Beyond the fear of higher interest rates. Or, in layman’s terms, a strong American economy.

    But at first glance, it’s not an apocalypse. Nasdaq closed at 15,592 on Friday. This is only a 7% difference from the all-time high in November last year.

    Still, open the hood of the highest technology index in the United States, and it’s clear that the internal machinery on the market is declining. Generals like Microsoft, Google, and Amazon are just a few percent below record highs, but junior officers have been shot. According to Mirabeau Securities data, 38% of the index’s stock has been cut in half since its peak.

    The dispersion between half and half knots is especially noticeable in the performance of ARK Invest’s Innovation ETFs run by starstock picker Cathie Wood. ARK’s flagship fund, long foretold by her market outperformance derived from making deep and peculiar bets on companies operating on the sharp edge of the technological frontier, peaked in February last year. Since then, it is currently in the midst of a 47% drawdown. Almost exactly When FT creates a profile for MsWood.

    Earlier this year, he wasn’t kind to the former Fidelity Fund Manager, and until Friday each of her $ 18.4 billion ETF 43 positions was in the red. Via Mirabeau again:

    That’s despite the wide open portfolio in sectors such as life sciences (Beam Therapeutics), electric vehicles (Tesla), telecommuting (Zoom) and gambling (Robin Hood).

    Let’s look at portfolio Overall, and you may find problems: Ratings.

    Much has been done over the last few years from the ridiculous valuation of technology stocks. Ten years ago, a price-earnings ratio of 40 was considered “expensive” even when a company was growing fast. A year ago, many people in the market 40 times Revenue For the same privilege. Some, like the buyers of cloud software company Snowflake, have tried to pay more than 100 times more sales.

    ARK as a fund specializing in speculative technology stocks was no exception. But what is surprising is that, despite a drawdown of nearly 50%, the portfolio is still expensive by anyone’s standards.

    This morning, FT Alphaville took data from the ARK website and calculated sales to futures from corporate value valued in multiples of the portfolio. The chart appearance is as follows (all dates are provided by S & P Global and Portfolio Weights as of January 10).

    Yes, it is a weighted average multiple of 31x futures sales. Of course, this is dragged up by portfolio outliers such as the autonomous trackplay TuSimple (247 transactions). Still, it’s amazingly expensive.

    About a month ago, Cathie Wood Told CNBC After the portfolio declined, she expected an annual compounded rate of return of 40% over the next five years. The holder of her ETF Some quotesCurrently, on average, they are underwater and have the same beliefs.

    ARK’s stock picks still look extremely expensive . . .  Source link ARK’s stock picks still look extremely expensive . . . 

    The post ARK’s stock picks still look extremely expensive . . .  appeared first on California News Times.

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