Tactic
Run a weekly open-door brainstorm with outside experts
Since 2001 Cathie Wood has held a Friday brainstorm where ~40 outside VCs, entrepreneurs, retired engineers and professors are invited in to push back on the team's research. The goal is to kill 'not invented here' and battle-test ideas.
“On Fridays at 10:30, we have a brainstorm. And the brainstorm is all our teams coming together or staying together. But we have another, I'm going to say another 40 people who who have followed us over the years and are passionate about innovation. And we invite them to what's called a brainstorm. And that is where we try to get out of this not invented here. We really want pushback.”
Steal thisInvite outside experts to a recurring session whose only job is to tear holes in your thinking.
Tactic
Give your research away as it evolves, not when it's finished
ARK's edge is publishing research and daily trades openly on social media (X) rather than guarding a closed research department. In a world where information is ubiquitous, openness gets the thesis battle-tested and builds a following.
“We're gonna give our research away, not when it's finished, 'cause it's never finished, but as it is evolving. And we push it out.”
Steal thisPublish your work-in-progress thinking openly to get it stress-tested and build an audience around your thesis.
Framework
Rebalance high-conviction stocks to exploit volatility
ARK trades a name like Tesla heavily not because it lacks conviction, but to rebalance: as a winner runs from $100 to $500 and becomes 13-14% of the portfolio, they trim and buy back on dips, using the stock's volatility to their advantage.
“We are using the volatility to our advantage. So rarely has Tesla dropped below the number 1 position in our flagship portfolio, ARKK. What has happened, it has gone from $100 to $500 and becomes, you know, 13, 14% of the portfolio. So from a portfolio management point of view, we are effectively rebalancing.”
Steal thisTrim your biggest winners as they balloon past a position-size cap and redeploy on pullbacks.
Number
ARK targets 15% annual return over 5 years
ARK's stated objective is a minimum 15% compound annual return over any 5-year window. Wood concedes they've missed it on a trailing-5-year basis but claim to have exceeded it since inception.
$15
Target compound annual rate of return over 5 years · percent/year
“So our objective as a firm is to deliver a minimum 15% compound annual rate of return over 5 years. So you are absolutely right. We have not done that. We have done that since inception. So since inception, our compound annual rate of return is over 15%.”
Story
ARK went viral in COVID, up 150% in 2020
During COVID lockdowns ARK blew up because it was the only firm posting its research and daily trades on social media while everyone sat at home with stimulus checks. The fund was up 150% in 2020 — and Wood warned on Bloomberg to keep powder dry.
“In 2020, we were up 150%. And at the end of that year, remember, we're 5 years away from that. This is what we're comparing against. At the end of that year, I was on Erik Schatzker's show on Bloomberg.”
Framework
The real money was lost by buying the top and selling the bottom
Wood's core lesson from the 2020-2021 cycle: people piled into ARK at the peak despite her 'hold your horses' warnings, then sold at the bottom — the classic destructive pattern. Rebalancing is the antidote so you have the psychological wherewithal to buy weakness.
“And there are so many people who piled in at the top, even though we're saying, "Hold your horses," and who left us at the bottom, which is classic. It's classic. And so we're gonna be out there in this cycle a lot more saying along the way, rebalance, sell, take profit so that when our, our strategies go through a weak spot, a sinking spell, then you'll have the psychological wherewithal to buy.”
Steal thisTake profits on the way up so you have cash and conviction to buy during the inevitable drawdown.
Tactic
Direct-to-cap-table venture fund with a $500 minimum, no carry
ARK's venture fund skips carried interest and lets anyone with $500 get directly onto the cap tables of SpaceX, OpenAI and Neuralink. They charge a 2.75% fee instead, sized to match what the best VC firms historically extract — and avoid the SPV 'fees upon fees' stack.
“We don't have a carry so that anyone with $500 can, can get onto the cap tables of SpaceX, OpenAI, Neuralink, and so forth.”
Story
ARK bought NVIDIA in 2014 at $0.20 — for autonomous driving
Wood reveals ARK held NVIDIA from 2014 at a split-adjusted $0.20 a share, bought as a robotics/autonomous-driving bet while everyone dismissed it as a PC gaming chip maker. They sold too soon into the ChatGPT boom but rotated proceeds into Palantir and Coinbase.
“nobody bothered to notice that we put it in the portfolio in 2014 because of autonomous driving at, I think, $0.20 on the current stock's basis at $0.20 per share. And we held it for years and no one would listen to us. No one. I talked about robotics, talked about autonomous driving, talked about, Nope, it was a PC gaming chip company and that's all it was. And then it explodes with ChatGPT”
Story
ARK bought NVIDIA in 2014 at $0.20 — for autonomous driving
Wood reveals ARK held NVIDIA from 2014 at a split-adjusted $0.20 a share, bought as a robotics/autonomous-driving bet while everyone dismissed it as a PC gaming chip maker. They sold too soon into the ChatGPT boom but rotated proceeds into Palantir and Coinbase.
“nobody bothered to notice that we put it in the portfolio in 2014 because of autonomous driving at, I think, $0.20 on the current stock's basis at $0.20 per share. And we held it for years and no one would listen to us. No one. I talked about robotics, talked about autonomous driving, talked about, Nope, it was a PC gaming chip company and that's all it was. And then it explodes with ChatGPT”
Story
ARK bought NVIDIA in 2014 at $0.20 — for autonomous driving
Wood reveals ARK held NVIDIA from 2014 at a split-adjusted $0.20 a share, bought as a robotics/autonomous-driving bet while everyone dismissed it as a PC gaming chip maker. They sold too soon into the ChatGPT boom but rotated proceeds into Palantir and Coinbase.
“nobody bothered to notice that we put it in the portfolio in 2014 because of autonomous driving at, I think, $0.20 on the current stock's basis at $0.20 per share. And we held it for years and no one would listen to us. No one. I talked about robotics, talked about autonomous driving, talked about, Nope, it was a PC gaming chip company and that's all it was. And then it explodes with ChatGPT”
Framework
Wright's Law: costs fall a fixed % per cumulative doubling
ARK's core forecasting tool. For a new technology starting from a low base, every cumulative doubling of units produced drives a consistent percentage cost decline. The internal combustion engine is mature with no doublings left, so EVs win on the learning curve.
“Wright's Law tries to understand, okay, you've got this new technology. You're starting from a low base. For every cumulative doubling in that base. So from 1 to 2, 2 to 4, 4 to 8, for every cumulative doubling, costs decline at a consistent percentage rate for each technology.”
Steal thisForecast a new tech's cost curve by counting how many cumulative production doublings it still has left.
Fact
Waymo riders pay more and wait longer than for Uber/Lyft
Cathie Wood cites research that in San Francisco people will wait longer and pay more for a Waymo than an Uber or Lyft. Despite being geofenced, Waymo's daily miles in the metro have surpassed Lyft and are closing on Uber.
“I think that Waymo, uh, we're finding research is showing that, uh, people are willing to wait longer and pay more for a Waymo, right, than for an Uber or Lyft. And I believe this has already happened— the number of miles, even though in San Francisco Waymo is geofenced and Lyft is not, uh, the number of miles in San Francisco, the San Francisco metropolitan area that Waymo is driving per day has surpassed Lyft and is heading for Uber.”