Why Is Cathie Wood Famous?

Why Is Cathie Wood Famous? Given the nature of the stock market, it’s not uncommon to see many prominent names come and go quite quickly as time goes on and the market changes. However, over the past several years, there’s been one name that seems to be thrown around more, not less. That name is Cathie Wood. But who is Cathie Wood, and why is Cathie Wood famous?

To find an easy answer to these questions, you must first look at her net worth. To find a better answer, it’s worth exploring how Cathie Wood got rich and what exactly she’s been buying and selling in recent years.

What Is Cathie Wood’s Net Worth?

As of October of 2020, Cathie Wood’s net worth was a whopping 250 million dollars. It’s worth mentioning that that was over six months ago, which means she could be (and very likely is) worth even more today.

A quarter of a billion dollars is nothing to turn your nose up at: With that kind of money to her name, it’s well worth exploring the how and the why of Wood’s remarkable wealth. By observing her rise and taking note of her philosophy, you might be find yourself investing in her string of exchange-traded funds, like ARKK – Ark Innovation ETF.

How Did Cathie Wood Get Rich?

Cathie Wood is often called the most underrated investor in the game, and for good reason: Not only is she incredibly persuasive in her investment arguments, but she’s also got the proven results to back up her surprisingly discerning claims.

You see, Cathie Wood was born to two Irish immigrants in Los Angeles, California. Thanks in part to an encouraging and supportive father who always pushed her to make her own discoveries in life, Wood went on to graduate with honors from Notre Dame Academy and then the University of Southern California with a degree in finance and economics — effectively laying the ground work for a future career in investment management.

That’s exactly how Wood became rich, by the way: through the management of ARK Invest, a company that currently boasts over $50 billion in assets under management (AUM).

She didn’t just end up there overnight, though: After college, Wood landed a job as an assistant economist at Capital Group.

Thanks to the guidance of her mentor Arthur Laffer (of the Laffer curve), Wood was able to put in the time and effort to move up in the world: this time to Jennison Associates, then on to co-found New York-based hedge fund Tupelo Capital Management.

Despite many career ups and downs during and after the 2007-2008 financial crisis, Wood was able to come out the other side better off than ever as she founded ARK Invest in 2014.

ARK Invest’s Cathie Wood: Her Big Idea

When first conceptualizing the central idea behind ARK Invest, Cathie Wood envisioned exchange-traded funds (ETF) that were actively managed and based on disruptive innovation.

Initially, she had hoped to float the idea at AllianceBernstein where she was working at the time. When they hesitated because of the assumed riskiness of the proposal, she decided to leave and do it herself. Thus, ARK Invest was born.

From there, Wood has gone on to accrue her impressive net worth, rack up $50 billion in AUM for ARK, and run two of the top ten female-run funds in the United States.

Cathie Wood and ETFs

To understand the true power behind Cathie Wood’s ideas about ETFs, it makes sense to explain what exactly an ETF is. An abbreviation for exchange-traded funds, an ETF is a security that tracks any sort of index, sector, commodity, or other kind of asset that can be bought and sold like a stock.

One of the most popular and well-known ETFs is the S&P 500 (SPY), but there are countless other ETFs out there to choose from.

Wood’s ideas about ETFs differ from the norm because ARK Invest chooses to focus only on disruptive innovation — this means that they’re only interested in ETFs that carve their own path while also causing a ruckus to the pre-existing path. An example of this would be Tesla, which Wood has famously championed for years now and insists will reach $7,000 a share by 2024.

Beyond this, ARK Invest’s EFT strategy aims to represent the biggest names and figures in the world of disruptive innovation, from leaders to enablers to beneficiaries.

To identify these figures, they use what they call an Open Research Ecosystem: research from top to bottom that is designed to locate the disruptive innovators before everyone else does.

Cathie Wood Investing Philosophy

This unique strategy in regards to EFTs is all part of Cathie Wood’s unique investing philosophy. After working in the industry for over 40 years now, she has plenty of experience working with and observing innovators — this is, in large part, the key to her investing philosophy.

She targets those disruptive innovators, yes, but it goes so far beyond that: Wood prioritizes the kind of open approach that leaps across sectors, markets, and even continents to home in on the best and brightest in science, technology, energy, and data that breaks new ground and paves its own path forward.

What Has Cathie Wood Been Buying?

To see this philosophy in action, let’s take a look at the stocks that Cathie Wood and ARK Invest have been buying and holding in recent months (in addition to Tesla [TSLA], which is a Wood essential):

  • Zoom (ZM), the video conference software and communications company that has been almost single-handedly responsible for keeping conversations going between friends, family, and co-workers throughout the COVID-19 pandemic

  • Teladoc (TDOC), a telehealth provider and AI and analytics company that has been especially relevant in the past year as many in-person doctors’ appointments and other health visits have been curbed due to social distancing and public health guidelines.
  • Square (SQ), a financial service and digital payment software that has been more essential than ever as more and more businesses move into e-commerce.

What Has Cathie Wood Been Selling?

On the other hand, it’s also worth taking a look at what Cathie Wood and ARK Invest have been trading — given her philosophy, this could suggest that these stocks are not as disruptive as they once were:

  • Intel (INTC), which Wood believes will be overshadowed by the more exciting up-and-comers in technology
  • Illumina (ILMN), which Wood says is only interested in cash flow and not innovation
  • General Motors (GM) and auto stock in general, which Wood claims pales in comparison to electric vehicles (EV) like Tesla (TSLA)

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.