07/11/2023
Brian and I were invited to attend a breakfast meeting with Cathie Wood, CEO and CIO of ARK Invest, at the Ayres Hotel in Costa Mesa, CA. Cathie has over 40 years of experience identifying and investing in innovation, Cathie founded ARK to focus solely on disruptive innovation while adding new dimensions to research. She is an internationally know specialist in disruptive technology centered around DNA sequencing, robotics, artificial intelligence, energy storage, and blockchain technology.
Cathie has been recognized as an influential fund manager across various outlets. In 2018, editors at Bloomberg acknowledged Cathie by selecting her to its second annual Bloomberg 50 list of people across business, entertainment, finance, politics, technology, and science who have defined global business. Additionally, Fortune named Cathie to its exclusive roundtable of experts in the annual Fortune Investors Guide: The Best Investing Advice for 2019 From Fortune’s Experts. In 2016, Cathie received the “Women in Finance – Outstanding Contribution Award” from Market Media. Cathie also has been a featured speaker at the World Economic Forum (China) in 2016 & 2017, the World Strategic Forum (Miami) in 2017, The Sohn Hearts and Minds Investment Leaders Conference (Australia) in 2018 and 2019, and Singularity University’s Exponential Finance in 2017 and Global Summit in 2019.
We were among a select group of about 15 advisors invited to attend this breakfast. Over the course of about two hours, Ms. Wood answered numerous questions from the audience. Some of her main points were that it is important to understand both the amount of money in the money supply as well as the velocity of money movement in the economy to get a better understanding of GDP. She also talked about crypto-currency and the attempts to regulate it. She also voiced her concern over the massive 400 bps (i.e., 4%) interest rate increases the economy has gone through since the beginning of 2022 and illustrated the magnitude of these increases using a simple comparative historical example:
When interest rates were 4 – 5 %, a 4% increase equated to an 80 – 100% increase
By comparison, for example, in 2021 when interest rates were 1% or less, putting a 4% increase on them equates to a 400 to 500% increase in the cost of money.
Combined with how quickly these increases have occurred puts a new perspective on the current economy. Coupled with all the unprecedented geo-political events going on around the world, which were brought up and discussed, it is very clear that the government needs to not default on U.S. debt or it could easily cause a global financial crisis.
It was a stimulating, open discussion. We were privileged to be able to participate.
