Recent interview of Cathie Wood on CNBC (search YouTube for "I love this setup, rotation is good news" to find video) got my head scratching around the math she just did in her statements. Back in February she said she expects 15% YoY compounded returns in next 5 years when ARK funds (say ARKK) was around 140 (down from 160 high) which now slid to 110 this week in May.
She said in that CNBC interview "Nothing has changed but the price" and now expects 25-30% YoY compounded returns in next 5 years.
So by simple math
140*(1.155) = 281 back then
Now she's promising : between
110*(1.255) = 335
and 110*(1.35) = 408
That's almost 20-50% higher but if nothing has changed then how does the number grow so much more in end result ? I don't follow the math or logic here.
Also, let's say give here benefit of doubt and say back in February she meant ARK price numbers that were in Jan 21 for YoY growth of 15% but then price was even lower between 120-140. So I don't know if she's bluffing (I'm gonna guess saving her skin and fund outflows) and taking us for a ride or is she really onto something that we don't know ?
If nothing has changed but the price then how does your model give these numbers ? Am I to assume these companies are growing faster than ever that their prices will skyrocket even faster ? Is there any proof ?
Submitted May 07, 2021 at 07:59PM by vgambhir https://ift.tt/3h76zQB
