Summary that I took away from this video: 1. Due to surplus of inventories, big companies such as Target, Walmart, and Home Depot are going to try to get rid of their inventories by adjusting their prices (e.g. sales). So we can expect this to contribute to deflationary in the near future. 2. USD has strengthen by 15%, which is a big inflation protector. 3. Used cars values are going to come down as mentioned several times in the previous weeks videos as well. 4. Bonds market interest rate are going down (prediction with R2 score of 95%), but the stock market hasn't understood that or realized that yet. So we can expect the equity market coming back up in the near future. 5. Cathie is expecting that the equity that are going back up will be the growth stocks, instead of the value stocks like back in 2020-2021. 6. Both of the speakers think that the Feds are making a mistake by tightening up the market too much, because the economics outlook isn't doing so well (high energy prices, low spending, and low consumer confidence) 7. Cathies thinks automation is going to play a big part of bringing manufacturing back to USA, it's going to benefit the USA greatly but will hurt the other countries greatly as well. 8. As mentioned in most of the ITK videos with Cathie, Cathie still stands firm on ARK's point of view on the disruptive technology and innovation.
And, yet, further to your point #7, the shipping ports of California have been ranked among the lowest in the world. That's according to an article by FrieghtWaves just days ago. Biden's Build-Back-Better plan is a failure. They are light years away from getting any automation. I'm sorry, but I'm afraid she's talking out of her butt.
I got from it that WMT will have to protect their margins, and raise prices more. After a horrific year+ Cathie is talking up her book. And the market.
Cathie and her team are special. It’s sad that their optimism and belief in a disruptive future is being crushed by this economic collapse. Will be hard times for awhile but 2-3 years from now she will be respected again.
Brilliant, as usual. When I heard about the Target and Walmart inventories, I immediately thought of you, Cathie. Thank you for these highly informative updates, keeping us one step ahead.
Thank you, Cathie. I didn’t expect this information but it was very useful. It would also be good to invite someone with an opposite view about inflation to understand why they think differently.
I am literally typing this in a mall parking lot. EVERY business has signs asking for help. We couldn't get food at Panda Express or a sandwich shop because they closed early. Both restaurants had signs on their doors saying they closed early because of lack of supplies! This is insane!
Innovation may solve a lot of problems. But most Arkk investors would just like the problem of how they have lost 75% of their money solved. I had a fund like hers in the 1990 s. It was run by Garrett Von Wagner. It was super in the 1990's. Then it sank like a rock in the 2000's. You can't manage money like this for long-term shareholder success.
What a great surprise to wake up to a special video of you Cathie and an another expert subject matter discussing economic activities, inflation and deflation. In times of turbulence and many" experts" out there pushing the wrong rhetoric, this is reassuring for sure. Thank you!
Cathie talked about too much inventory many months ago and how it was going to be a problem for companies. Now it is happening on a large scale with Walmart and Target and soon to be more companies most likely. I love Cathie’s conviction. She does not sway from what her research tells her and her knowledge of economics and it’s inner workings is quite fascinating. I love all her videos but this one with Nancy Lazar was especially informative and hopeful. Thank you ARK.
Do you understand that companies increase their inventories when they expect prices to continue to increase creating an inflationary spiral? ARK are trapped in their confirmation bias bubble, they only consider what supports their initial assumption and discard the rest.
Jan 1, 2021: $ARKK 137.44, May 19, 2022: $ARKK 42.41. (1-42.41/137.44) x 100 = 69.14%. Same period: NASDAQ is down about 20.26%. Yeah, I am stupid and don't understand innovation, dear dream sellers. Maybe reality is just a myth.
Although I disagree with many of your positions, I do greatly admire your ongoing communication efforts and your thoughts. If only our country had a long-term plan and leaders had such a great style. IMO, asset bubbles need to be deflated. Remember, when Obama took office in 2009, the S&P was at 1000 and the Dow 8750, as a reference as we wonder how deep a correction could be at bottom. Massive debts will be the global trigger to defaults and deflation. China, Russia, Sri Lanka, Pakistan, Iran, Turkey, Argentina, are collapsing already. Increasing US Fed rates equates to zombie companies failing, highly leveraged companies hurting, profits being squeezed, stalled projects/growth, and slowing of sales. Food, energy, Rents, and labor Inflation will be sticky. Real estate (regional) takes time to correct but will with rate hikes. I think 'low leveraged' profitable Cannabis companies may recover in stock price (like YOURF), since they represent cash transaction based high sales growth in comparison to technology growth that has a long waiting timeline that depresses PEs as rates increase. I disagree on CISCO, ... Edge computing is forecasted to grow big time as IOTs grow and data needs to be closer to decentralized applications and sensors. The trend is from all public cloud to Hybrid clouds (mix of public and on-prem clouds & edge). Remember, the cloud isn't magic, it's enabled by CISCO products primarily (hardware/software). The reduced forecast for CISCO could be based on chip shortages and their forecast of a recession.
Thank you Cathie and Nancy. I really appreciate the insights you shared in this video. I'm going to watch a second time to make sure I didn't miss anything!
Such a great video! Two incredibly intelligent women. I could listen to you both discuss anything and everything all day long. I love this point of view, I agree with this outlook and I can’t wait until it all comes to fruition. I know you’ll stay humble when it’s proven you were right the entire time.😍
In regards to inventories, I would suggest another explanation…prior to COVID, companies such as Target, WalMart, and HomeDepot would operate their supply chains in just in time inventories. Because of the lack of reliability of shipping through the ports, whether is was getting the space on the ships, or getting their product through the port operations, the big box retailers have basically changed their policy to get it on the ships as soon as you can and dealing with it once it arrives. Many companies were burned last fall finding their Halloween goods still on ships or on the dock by Oct 31st. Hence, inventories have increase, whether it’s on the water, on the docks, versus getting it through their distribution channels. If you check with the ports, you’ll find the biggest perpetrators of idle cargo on the docks have been big box retailers. So it’s not so much they have too much of a product, they have a great deal of the products earlier than then need to bring the products through their networks.
Cathie. Your core premise - invest in exponential disruption is spot on. The problem with disruptive technology is quite often the final dominant players in any market have not been formed yet. Running an ETF consisting of a portfolio of these stocks implies by design that each stock will be extremely volatile and 90% of the stocks you can invest in today are not going to be there when the market matures. By nature, technological disruption breakthroughs are unpredictable so you can't reliably pick winners. The potential for reward is still exponential but you have to be able to actively trade those positions on the short and long side using options to enhance return. I've been test running a portfolio based loosely on your portfolio. I've been short since November and played strategic options and gone briefly long on technical indicators. Since November it went from 100k to 340K. I would offer a humble recommendation that you introduce an actively traded element to the portfolio not just to hedge but to enhance the return. Of course there's a limit of scale but as it stands your ETF is hobbled by being a one way street committed to long term holdings of companies, 90% of which are going to blow up. I would love to discuss it more with you. You have the power and potential to make ARKK's performance increase exponentially with the right active management strategy.
Just like in 2000. 2008. Commodity prices rose before the collapse , we have had divergence on weekly time frames in almost all sectors and now also in commodoties / oil. The deflationary collapse wont help ARKK , new leaders of course will arise, ARKK is history accept it
@@OralCareRoutine when this happens people will say "look ark is best invest now!!!" Then she goes down and they say "haha, what a garbage I bought, sell now" Then ppl wonder why 90% of ppl lose money. And YET retailer does the same thing over and over again
It's interesting to listen to Cathy. Her view on inflation is baffling in the sense that it disregards the money supply issues through asset purchases by the FED. And as we know inflation is a monetary phenomenon.
You say that tangible assets will excel, yet the Fed has been talking tough about real estate and it appears they will be focusing their policy changes in order to reduce costs-of-living. It seems like the environment will support the tangible assets you mention until the Federal Reserve gets up and starts front-running rate hikes until they see the edge of a recession, which will *also* naturally clear away some of the inflation.
Great as usual - more expert, contextualized insight and less groupthink pablum than seen on standard media like Bloomberg or CNBC - but having Nancy Lazar join is a special treat.
Many thanks for this Cathie and Nancy. We only get to hear such valuable insights only because of disruptive innovations like the internet and RU-vid. in the past, people would have to fork out thousands for professional consultations.
a Question for Cathy & ARK: IF the Fed just doesn't change its current relatively Hawkish stance, will 'Value Stocks' be the better bet for the average investor moving forward? i know ARK tends to focus on 'Growth Stocks' but maybe, with this current Fed policy, we really are in a new Paradigm that has to be adjusted for? maybe an 'ARKV' (V for 'Value') can be offered, i'd be interested in it!
Tony Seba, in his talk to the council of state governments east Aug 17th, under-spoke of what he called "turmoil" and "swirling turmoil" in economies resultant from the economic transformation. Better characterizations are volatility, economic and social violence - as old. stranded industries grasp to hold on. Second, Peter Zeihan's talks and books are very helpful as he looks at demographics and geography to lead economic trends. It's unfortunate that ARK closed the comments on their recent interview with Zeihan.
Great Video! I love the data on inventories and the perspective of deflation. Hopefully by this Q3 we'll see some sort of bottoming and end of this year will be back to a bull market.
Thank you for the clear analyses. Our situation is quite historically unique, and it’s difficult for even experienced professionals to understand the dynamics.
"Ask five economists and you'll get five different answers - six if one went to Harvard." - Edgar Fielder Hyperinflation is coming, and will completely destroy America. America: 1776 - 2020 🇺🇲
I think you are right, but it’s a tough sell right now. Lots of new investors have not been through rough times - I deal with it by focusing on other things in my life. Good luck with your investments.
yes, the deflationary pressures will be on Household goods and consumer products. Televisions, cars, furniture, household goods, ect. However, the inflation pressures will continue with food, gas, travel and other areas of the economy. We are living in a very fascinating, concerning and interesting times.
Milton Friedman, Nobel laureate in economics, was adamant that two things cause inflation, excessive government spending and printing money. He gathered this information from over a span of 100 years and multiple countries. I think Friedman was correct and you guys are overthinking this cause of inflation.
Thank you for the great insight i.e. elaborating on factors contributing to deflationary pressure, two big question marks remain: 1. high energy prices? (slow pace of transformation to renewables, Ukraine conflict, lower domestic oil & gas output) 2. do you see re-shoring of supply chains really happen that quickly?
It is interesting that the more you talk about deflation, the higher the inflation rate becomes. I think innovation does bring a deflationary effect but not sufficient cause a deflation.
If only the government stopped spending money created out of nothing by the FED... We need this inflationary bubble to be brutal, it is the only way people will learn
The problem with the thesis that excess inventories will lead to lower prices is the following.......increased fuel prices might induce companies to keep prices high.....fuel costs are enormous for Walmart and target....
Companies can’t just hoard inventory forever, and they’ll need to show cash flow on their quarterly earnings regardless of the profitability of said goods. Also, Walmart and Target may on be two companies out of thousands, but they’re two of the largest. Every average consumer shops at Walmart - if their earnings are slowing, then the economy is slowing.
From another article, the inflation rate is much higher for goods, services are only 3.5% which says it is still a supply shock issue. I'm in the print business for over 35 yrs. It is actually quite busy right now, the problem is getting supplies, paper (I have orders where I have to wait weeks for carbonless stock) and months for thing like toner for my digital press. It is literally unprecedented. But as another person pointed out below, many stores are having difficulty getting staff.
Valuable insight as always. I've found that a general appreciation of the economy from a macro perspective helps me make more informed financial/investment decisions personally. Separately, while watching the episode, I was somewhat distracted by my curiosity about the intended message of intentionally displaying the flag so prominently in the frame.
With Cathie Wood and the great US economists Who can answer my following questions? 1. Is the Deflation the best way/weapon to deal with the Inflation? If the answer is not, why the FED is doing so right now? 2. Generally, Inflation and Deflation, which one is more harmful to the economy? 3. Throughout the history, the Inflation is everlasting. How much the health inflation rate should be? 4. Inflation is not just a national phenomena, but also a international phenomena. So, dealing with inflation, we should not just have a national view but also an international view. My questions is, if in a quite long period of time(let's say 10 years or 20 years), A country keeps having higher inflation rate than B country, and meanwhile the currency exchange rate between A and B was almost a constant , does that mean as the time goes, the people in A country will be much more richer than the people in B country? That's what happened between the US and China in last 20 years. That's why we see everything is more and more expensive , because we are more and more poor than the Chinese.
Where are you seeing Target 'marking down prices?' I watch it closely and my stores are all still increasing prices. And many shelves are still not well stocked.
I hope Nancy and Cathie are right, but I worry that they find what they want to find. It can happen to anyone including people at the top of their field. I have no idea what will happen, but I do enjoy getting this point of view to counter the doom and gloom crowd.
this is kind of crazy to see. The vast majority of comments on this video are positive and thankful. I have not seen that on hardly any channels at all.
