Cathie Wood’s Update on the Market Crash | Details.

hey everyone meet kevin here kathy wood

just provided some new insights into

what her opinion is of the market and i

thought hey you know what why not add a

little bit of insight on top of her

insight

because well it's always good to have

more insight right and if i say

insight one more time i think we're

gonna have to start a challenge where

you take a shot every time i say insight

okay let's get into the insight so we're

very excited

she says about the opportunities of the

last few weeks

and i have to say of all the

paper-handing sissies that exist out

there like mr

chamspock who decided to block me on

twitter

uh yes thank you kathy for breathing

some life

into the wonderful opportunities that we

have presented

to us there are so many wonderful

opportunities and to keep buying at

times like these

actually is the reason why you can

generate wonderful returns

by holding through these times and

investing

kathy woods says her goal is to return

15

compounded over the patented over the

next five years to essentially double

her money she might end up doubling her

money over the next

year because she is diamond handing and

buying

high quality high conviction stocks

during a time

when there was a lot of fear and as

kathy woods says this is a gift to

anyone

averaging in very well so what does

kathy wood

specifically recommend that we invest in

well of course transformative innovation

she believes this is where we will see

exponential growth for example in evs

she expects ev sales to compound at 82

annually over the next five years which

that is

almost a doubling every single year over

the next five years is what kathy wood's

expectation is

going forward she says look one of the

issues that we have

in the traditional investing model right

now

is that most analysts at maybe um by

side

institutions are too reliant on old

school models

too reliant on old school let's look at

the price to book ratio let's look to

at the price to earnings ratio and if it

doesn't line up with

our traditional measures of value we're

not interested and we'll just

go buy some att stock because we'll get

a nice seven percent dividend over there

kathy wood is right kathy wood realizes

that a vast majority of wall street has

no freaking clue how to value

a company like tesla or in her opinion a

company like a roku

or even a square how do you value the

fact

that jack dorsey is selling his first

tweet

from 2006 as an nft

and what if this is just the door opener

to jack dorsey over who runs obviously

not only twitter and

found twitter but also helped not only

not only run square but help found

square and cash app how do we value the

fact that this could

be the beginning of cash app offering

nfts

and or or twitter now selling tweet

nfts as a service what if you integrate

nft purchasing

into the freaking platform i mean the

endless

possibility of these innovative

companies is the reason why kathy wood

is investing in these

and is the reason why when times are bad

and times are

red and painful kathy wood has

essentially become groomed to say

no no these are the times to buy in fact

that is actually

how kathy became popular in the first

place kathy bought

all of the under valued under

appreciated high-growth names

like the teslas in 2016 17 and 18 when

it was hard

when it was unpopular when she was hated

for doing it

and of course now kathy wood comes

across as the hero

after markets are very very green for a

few years

but the real effort was made when nobody

wanted

to be on her side and nobody wanted to

buy during the red

because people would rather uh no i'm

gonna re-evaluate my options i'm just

gonna i'm just gonna sell

i'll just sell out a virgin galactic not

to mention any names i'll just sell out

a virgin galactic

i'll go re-evaluate my opportunities

because it's been a tough week

anyway kathy wood goes on to say that

she discloses her holdings every day as

an actively traded etf because there are

very few actively traded etfs

she's right about this and that's part

of the rules of the game

but she does something special and also

publishes her research

and by publishing her research she

actually believes look we put our

research out there for criticism and

commentary

and that is how we are able to sort

through the fud

the fear uncertainty and doubt by seeing

what

society thinks we can help adjust sort

of our research and our formulas and our

expectations for companies

and see okay is there sort of a black

hole in our research so in a crazy way

by kathy wood putting her research out

she's actually improving the performance

of her fund

just by being open to commentary now i

have to say it is weird though that

their youtube channel doesn't allow

comments but hey we can still get

insights from what it is that she says

and obviously twitter is still available

as an opportunity to interact uh with

archives

but anyway another issue that kathy what

talks about in her latest

talk is how analysts are really stuck

to comparing themselves to what the

index funds are doing what's the s p 500

doing as long as we can beat the s p 500

we're good

kathy wood doesn't care about the

indices kathy wood isn't fighting to try

to be right

for a year or 18 months or two years

her goal is 20 years from now to be able

to look back and go

wow look we did invest where technology

is right where technology

ended up happening and we saw that

coming and we invested at the early

phase

of the s curve and this is something

that i thought was actually really

powerful

in the last discussion that she had and

she says hey look here's the thing

when it comes to investing in

transformative industries and you're

investing in

an early part of the s curve realize

that once you see 10 15

20 growth that is when you are

investing at the early part of the s

curve

and well usually when we hear that

unless we're super familiar with it

it can be a little confusing so why

don't i just quickly pull up the ipad

here and let's just draw what she means

so what kathy wood is talking about is

when you invest

early on and you start getting that 20

percent growth that 10

growth and you're starting to see that

compounding growth

that could just be the beginning of what

it will eventually

be this exponential growth and then this

essing right

so this is something that i've actually

mentioned personally on this channel

about tesla before is that i personally

think

tesla is very early on this exponential

growth curve that that growth is still

ahead

and today short of saying that about

tesla

kathy essentially gave us this insight

that the industry she's investing in

right now especially the ev market

she still thinks is early in the

exponential curve

you know we look at tesla stock and

we're like come on it went from

you know 2 000 to essentially or 200 to

2000 that's 10x

then split uh a 5x or divided by 5

right in the stock split and then went

back to 900 like how could you not sell

and take profits on a tesla what's

because why would you sell

out of something that you were still so

early in on the s curve

we're just beginning the transformation

kathy woods says this is this whole

process

of building wealth with these

transformative companies gosh the

transformation is just beginning

with this kathy woods says golly how

could you not

invest in these transformative

industries why would you go invest

into companies that are dying into

companies who are not

transforming and adapting why would you

invest

and i'm filling these names and she

didn't mention these right but

essentially kathy was saying

why would you go invest into traditional

let's say

automakers like a ford why would you

invest into something uh

like a movie theater why would you

invest in retail and this is her words

okay look i'm all for

diamond handing on amc but these are her

opinions she's why would you invest in

these

potentially dying industries she says

look you think the retail

it can't get any worse for retail after

going through what happened with coven

she essentially laughs at that idea and

says you haven't even seen the start of

it yet

the fact that we've only transitioned to

about 20 percent of sales online sure we

4x the amount of growth

in online thanks to covit but the fact

that we're still only 20

of sales being online online has a whole

lot of disruption ahead of it

she didn't mention names here but

obviously we can fill in we know that

is good for the apple the etsy the

wayfarer

the amazon we know that's good for these

platforms she invests in square we know

that's also good for square

because what does square do it helps

move businesses online

with their omnichannel distribution

network or not just their distribution

network but their distribution platform

for getting channels to have the same

inventory management system

offline as they do online so it becomes

much easier to scale

online and get retail online finally

obviously shopify does a lot of this as

well some who already have stores prefer

square and the transition for uh going

from store to online or having both

with square but either way both great

companies

kathy wood makes it very clear that if

you're investing in

arc funds you're getting innovation

and transformation you're not getting

the stuff

that might be sexy for a brief period of

time

like oh yeah there's a rotation into

value you're getting something that will

go through periods of i don't want to

invest in tesla right now it seems too

overvalued

you're going to go through those periods

but you're investing something that in

10 years from now

you can look back and say hmm yeah got

in that s curve early

just like kathy said i have to agree

with everything she's outlined

now i don't necessarily agree with every

single stock pick that kathy wood makes

it's one of the reasons i personally

don't invest in

arc but i could never say anything bad

about what kathy's doing because what

she's doing is

exactly what i believe i think it's

great and i'm not saying i'm copying her

she's copying me

we can all have our own opinion about

this and pick different stocks and

different allocations

hey you want to copy what kathy wood

does with your own tweaks or what i do

with your own tweaks

gee go to like m1 finance go to

medkevin.com m1

sign up for m1 finance you can make your

own pie your own sort of

little mini etf if you will and and do

it yourself

it's there are so many options for you

to invest

in sort of a pie or or you know a

portfolio of stocks yourself in an

automated way but what else does kathy

tell us well

she tells us look there is a lot of

fear uncertainty and doubt regarding

evaluations right now

but when it comes to asking if we're in

a bubble kathy woods says

absolutely not she doesn't believe that

we're in a bubble

she thinks bubbles are actually

backwards looking

that all we're really doing is or what

some people are doing is they're saying

well tech and ev must be in a bubble

because the prices are so high

and look at the run-up we saw before the

dot-com era well that was a bubble so

why isn't this

a bubble she says this is the problem

with looking backwards

is when you look backwards all you see

is a chart going up

and assume that that means it must be a

bubble when kathy wood says look the dot

com era was early

25 years too soon but we are now in

prime

time the plants she says are now

flourishing

the plants that were planted then the

seeds then are now flourishing

and then now is the time where we take

technology into reality and

into prime time of making attendees

basically

we're at that that s curve phase of just

beginning and this is

really really good news for disruptive

innovation

when kathy talks about the fed she talks

about how look

we're going to see that cpi bump to

three to four percent that temporary

base effect

interest or you know inflation data that

we've been talking about on this channel

we're going to see that

but it's going to be temporary now

what's interesting is

kathy wood still maintains that she

thinks there's a good chance the federal

reserve could raise

interest rates sooner than the fed

believes

but kathy wood believes that in the long

term we're not going to see

hyperinflation

we're not going to see anything higher

than maybe a four percent interest rate

in the future even that personally i

think is pretty high i think the fed's

likely to stay around

uh you know fed discount rate of maybe

two and a half percent we can differ

there

but the reason she gives for inflation

being temporary is fascinating

and she's talked about this before but

it's worth reiterating it's worth noting

that

she believes there are two types of

deflation one

is deflation that comes from technology

hey the easier it becomes to manufacture

iphones the cheaper iphones can become

and better technology somebody can get

in their hands for the same

cost of dollars that they spend you know

five hundred dollars spent on an iphone

10 years ago

gets you way crappier technology than

five hundred dollars spent on an iphone

today that is a form of deflation but

there's also and that's a good form of

deflation because we get better stuff

for less

but she also reiterates that there's a

bad form of deflation and that's when

you get legacy companies like ford

having to cut prices in the future

because

they fail to innovate they failed to

keep up with the disruptive

curves that we are seeing today and she

thinks there's going to be a lot of

confusion

she thinks one of the reasons we see

such low earnings multiples

and some of the legacy companies whether

they're retail

or companies that just aren't innovating

is because there's confusion

she thinks a lot of people look at a

stock and say oh well tesla must be

overvalued

because the price to earnings ratio is

so high and oh

another company must be a good deal

because the price to earnings ratio is

so low

and she says this is going to lead to a

crisis essentially

we're going to see bankruptcies at some

of the

original the og companies potentially

the fords

the gm the movie theaters of the retail

and all of these high valuations that we

look at now it's like oh my gosh you

know 200 300 p e ratio

that in the future might have a 50 times

earnings multiple

but they'll actually be printing money

because they are on the right side of

change

now kathy does briefly talk about how in

her opinion stimulus passing is going to

lead to

higher taxes in either the form of

higher inflation or future taxes which

is something that joe biden is

potentially more likely to do she

says but ultimately she challenges

investors

are you on the right side of change are

you on the right side

of history now what i want to do is just

briefly pull up

m1 finance and just look at some of my

mo more

high conviction stocks and see are these

in my opinion

obviously i'm opining about my own

choices here on the right side of change

and so for example my top 10 are stocks

like

etsy tesla enface expi peloton pinterest

lemonade neo redfin

and cciv lucid personally to me

none of these are legacy companies none

of these

in my opinion are failing to innovate

some of them might be trading at rich

valuations and even i personally i bag

on peloton and lemonade for being too

expensive right now

i bag on etsy for being too expensive

when it's over 225

i get upset when neo is in the 60

price range it's obviously much cheaper

right now and this is where we have to

look at what kathy says and go

damn all of those have just had a

massive sell-off

that's an opportunity we like to say

christ attunity

is another option when i do go out to

for example my

top 60 stocks we get a little bit more

of

some of the legacy companies i do put in

you know my wayfarer my shopify etsy

pinterest lemonade shift technology

tattoo chef chipotle

these are some great ones i do have a

couple legacy companies for example if i

go to

safer tech and consumer you can see

these by the way go to medkevin.com

1337 for example under say for tech and

consumer i have some legacy companies

i've got

you know maybe five six uh percent in

total allocated to stocks like

target lows home depot walmart but

personally

i don't think those are the companies

she's so worried about

uh you know disappearing i think she's

more referring to

mostly the legacy automakers i don't

think she's very excited about those

uh but look kathy what does look at

these sorts of stocks even she even

looks at apple and says

apple might be a little bit more of a

cash play it's interesting maybe she's

taking a little bit of a blunt point of

view

but you have to say when it comes to

innovation she is

all in on the frontier of that i'm

skeptical of some of the choices

especially in bio and maybe that's just

me not being educated enough

so we'll do some more research there

we'll see how things develop

but look if you need any motivation to

say hey

let's double down let's be on the right

side of change and let's invest when

things are cheap

just listen to kathy she posted her

latest video which you can watch

i obviously gave you a little synthesis

or a summary here along with my

commentary if you found this helpful

consider sharing it and folks

we'll see in the next one