Why the disdain for managed funds like ARKK that destroy total market funds?

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Mel Lindauer »

And how about Bill Miller? Didn't I see any article about him cruising off into the sunset on his yacht? Or was that some other former star fund manager?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by donaldfair71 »

Mel Lindauer wrote: Wed Jan 05, 2022 12:06 pm Perhaps part of the problem is in response to the rather provocative OP
Why the disdain for managed funds like ARKK that destroy total market funds?
DESTROY total market funds?
Yeah it’s one thing to ask a question out of sincerity and, perhaps, the original OP didn’t mean to deride total market funds. But I also can’t blame anyone for taking it as though the OP did, it’s (the headline) not exactly wading softly into a discussion.

I also don’t get people affixing some greater responsibility to those now using returns to throw it back at the OP. If people stopped coming here because there’s a regular reminder that this thread exists, they probably weren’t long for here anyway.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by donaldfair71 »

willthrill81 wrote: Tue Jan 04, 2022 11:30 am
peskypesky wrote: Tue Jan 04, 2022 11:20 am
willthrill81 wrote: Tue Jan 04, 2022 11:12 am
lostdog wrote: Tue Jan 04, 2022 11:11 am Update from the OP going 30% ARK?
The OP has been MIA since the end of October.
Uh-oh. That's not a good sign.

Well, I jumped on the ARKK train in 2021 myself, and after a few months of losing, I sold at a loss and jumped off. It has just continued to drop since then.

I learned my lesson and am sticking with passive index funds.
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
I’ve learned a lot from you, your posts are the impetus of my current investigation into historic interest rates, how they compare to inflation, etc. I am still trying to wrap me head around that the last 40 years in bonds were the outlier, not the norm, and you were the first person to stress the repercussions of that.

I will disagree, respectfully, that ideas about strategy are not able to be discussed. I think that style of some posters trumps substance, especially the OP in this thread. The alternative would be to ignore this thread, or create dialogue to help the OP become better informed. Not sure (again, OP can always chime back in) that was the goal in the first place.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

donaldfair71 wrote: Wed Jan 05, 2022 7:39 pm
willthrill81 wrote: Tue Jan 04, 2022 11:30 am
peskypesky wrote: Tue Jan 04, 2022 11:20 am
willthrill81 wrote: Tue Jan 04, 2022 11:12 am
lostdog wrote: Tue Jan 04, 2022 11:11 am Update from the OP going 30% ARK?
The OP has been MIA since the end of October.
Uh-oh. That's not a good sign.

Well, I jumped on the ARKK train in 2021 myself, and after a few months of losing, I sold at a loss and jumped off. It has just continued to drop since then.

I learned my lesson and am sticking with passive index funds.
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
I’ve learned a lot from you, your posts are the impetus of my current investigation into historic interest rates, how they compare to inflation, etc. I am still trying to wrap me head around that the last 40 years in bonds were the outlier, not the norm, and you were the first person to stress the repercussions of that.

I will disagree, respectfully, that ideas about strategy are not able to be discussed. I think that style of some posters trumps substance, especially the OP in this thread. The alternative would be to ignore this thread, or create dialogue to help the OP become better informed. Not sure (again, OP can always chime back in) that was the goal in the first place.
Thanks for the kind words.

Ideas about strategy can and certainly are discussed. But as I noted above, there is too much hubris present with too many posters. Nobody has all the answers, not even the forum's namesake. Nobody knows the best investment strategy for everyone in all situations. It's called personal finance with very good reason. We should all have a healthy dose of humility and not treat our own investing worldview as automatically superior to others just because the echo chamber agrees with us. That kind of thinking can be downright dangerous.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Weathering »

MSEQX seems to have consumed the ARKK coolaid. Their picks transitioned from MFAANG in 2021 to hype growth stocks of last year. Fund lost 10% in the past 2 days. Geese! Makes me want to say, “BARKK!”
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Weathering »

Weathering wrote: Wed Jan 05, 2022 10:01 pm MSEQX seems to have consumed the ARKK coolaid. Their picks transitioned from MFAANG in 2021 to hype growth stocks of last year. Fund lost 10% in the past 2 days. Geese! Makes me want to say, “BARKK!”
-11.65% in 3 days
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by unclescrooge »

Weathering wrote: Wed Jan 05, 2022 10:01 pm MSEQX seems to have consumed the ARKK coolaid. Their picks transitioned from MFAANG in 2021 to hype growth stocks of last year. Fund lost 10% in the past 2 days. Geese! Makes me want to say, “BARKK!”
SARK (short ARKK) fund is up 8.6% in the past three days.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by BrooklynInvest »

I think I remember Warren Buffett saying that the most important attribute for a successful investor was humility. When I read it I thought he was talking about money managers specifically but he may have been talking more broadly?

My road to bogleheaded-ness was a winding journey. AOL stock and others were my "sure fire bets" 20 years ago. I try - not always successfully - to remember that it's a process for everyone.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

I believe ARKK will be down something like 18% after today, assuming it doesn't rebound, through 8 trading days in 2022. As someone who decided to hold his small (3% of taxable portfolio) position, this is a learning experience.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by RJC »

About a year ago my friend was telling me how great this fund is. What timing!
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

RJC wrote: Thu Jan 13, 2022 2:10 pm About a year ago my friend was telling me how great this fund is. What timing!
I still have family members doubling down as it drops. I can't say that thought has ever crossed my mind.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

Maybe a good fund to buy if we have another parabola ahead of us after this pullback completes?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by firebirdparts »

atdharris wrote: Thu Jan 13, 2022 2:27 pm
RJC wrote: Thu Jan 13, 2022 2:10 pm About a year ago my friend was telling me how great this fund is. What timing!
I still have family members doubling down as it drops. I can't say that thought has ever crossed my mind.
bold strategy, cotton, let's see if it pays off for him.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Californiastate »

Don't fight the Fed.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

000 wrote: Thu Jan 13, 2022 3:55 pm Maybe a good fund to buy if we have another parabola ahead of us after this pullback completes?
Maybe

Image
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

nisiprius wrote: Thu Jan 13, 2022 4:36 pm
000 wrote: Thu Jan 13, 2022 3:55 pm Maybe a good fund to buy if we have another parabola ahead of us after this pullback completes?
Image
So back to TQQQ then, eh?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by thenextguy »

atdharris wrote: Thu Jan 13, 2022 2:27 pm
RJC wrote: Thu Jan 13, 2022 2:10 pm About a year ago my friend was telling me how great this fund is. What timing!
I still have family members doubling down as it drops. I can't say that thought has ever crossed my mind.
Cathie Wood can be very persuasive if you listen to her. She can tell a good story. I actually held some of her funds for a short while last year. I only lost a little bit before I realized this was completely against everything I believed!

The problem is that I think she's dead on regarding the impact the "innovation platforms" she always talks about (although I'm not sold on blockchain). BUT that doesn't mean it's easy to invest in.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

Has the OP ever responded? This is a great learning experience, if nothing else.

Or maybe they went all-in shortly after posting this thread, and is now stalking the forum ignominiously.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by anon_investor »

xraygoggles wrote: Thu Jan 13, 2022 6:04 pm Has the OP ever responded? This is a great learning experience, if nothing else.

Or maybe they went all-in shortly after posting this thread, and is now stalking the forum ignominiously.
Interestingly, around the time this thread was started, I had a former coworker who changed jobs and rolled over his 401k into an IRA and invested all of it into the different ARK ETFs... he doesn't like to talk about it... he only talks about his individual stick wins in his taxable account.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Nicolas »

xraygoggles wrote: Thu Jan 13, 2022 6:04 pm Has the OP ever responded? This is a great learning experience, if nothing else.

Or maybe they went all-in shortly after posting this thread, and is now stalking the forum ignominiously.
The OPs last post, not in this thread, from 10/26/2021:
Bwlonge wrote: Tue Oct 26, 2021 10:56 am I tried picking stocks for a while, had solid information and those stocks are now doing well but with a lot of volatility. I still managed to lose money on them. I'm coming back to passive investing because the hype around investing just isn't for me. It's still very hard knowing people are getting rich quickly while I am not.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by unclescrooge »

firebirdparts wrote: Thu Jan 13, 2022 4:06 pm
atdharris wrote: Thu Jan 13, 2022 2:27 pm
RJC wrote: Thu Jan 13, 2022 2:10 pm About a year ago my friend was telling me how great this fund is. What timing!
I still have family members doubling down as it drops. I can't say that thought has ever crossed my mind.
bold strategy, cotton, let's see if it pays off for him.
In order for it to pan out, wouldn't growth have to limited to a smaller subset of the market? What happens if all companies see growth, not just this small subset? Is it worth overpaying to such an extent for these companies? I find that hard to rationalize.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

Escapevelocity wrote: Wed Jan 05, 2022 5:45 pm
canadianbacon wrote: Tue Jan 04, 2022 11:09 am
willthrill81 wrote: Tue Jan 04, 2022 10:16 am
atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
you forgot Garrett Van Wagoner
When I was much younger, I held Van Wagoner's Post Venture fund back for a while. It had some tremendous years before the dot-com bubble popped.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by criticalmass »

I don't see any evidence that ARKK has caused any damage to any total market fund, let alone destroy anything. I have no concerns about keeping most of my equity portfolio in index funds, including total market.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Hyperchicken »

ARKK - You were the Chosen One! It was said that you would destroy total market funds, not underperform them.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by princetontiger »

Anyone remember Fairholme?

These things are easy to spot. Every bull has its fund.

Meanwhile, VT is down 3% from its highs. Not 60%... and down 2% past few months, not 30%.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by princetontiger »

000 wrote: Thu Jan 13, 2022 3:55 pm Maybe a good fund to buy if we have another parabola ahead of us after this pullback completes?
Probably not.

The 2009 - (most likely) 2030 bull has had several bubbles: meme stocks, cannabis, social media, social gaming, etc. This is just the latest iteration.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by leonidas »

Hyperchicken wrote: Fri Jan 14, 2022 12:15 am ARKK - You were the Chosen One! It was said that you would destroy total market funds, not underperform them.
"It is the Index funds that are evil"
--Darth ARKK
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

To me, the evidence that it is bad to invest in things like ARKK is that--based subjectively on forum posts and occasionally dipping into the financial press--

"Nobody" had spotted, recommended, or talked about ARKK during the time period from January, 2017 through August, 2018, a twenty-month period over which it multiplied investors' money by 2.5x and turned in a remarkably steady growth averaging +70% per year.
  • Cathie Wood was the same person
  • Her strategy of single-minded focus on "disruptive innovation" and nothing else was the same
  • The fund had been around for over two years, plenty of time to find out about it and decide if you believed in the strategy
  • There was well over a year available to spot the performance and get in on it.
  • There was no decline following August 2018
  • Anyone who got in late on 1/2017 to 8/2017 would have done pretty well and there was no decline to scare them off, so they'd have been set up for 2020.
Furthermore, practically nobody was talking about ARKK in early 2020. The talk began quite late in the year.

Look at how hard it would have been to lose money in ARKK!

Source

Image
Look at the chart. To date, it has been almost impossible to lose significant money in ARKK! You'd have had to be a mistiming genius to do it! There was a total range of seven years for your buy and sell dates. I don't know how to characterize this precisely but broadly, to lose money you first needed to buy within about a four month period--wait until you'd missed out on most of the 2021 growth, and then you needed to wait for it to tank a bit before selling, perhaps another eight-month period.

My point is: even if you believe there are geniuses who can "destroy" VTI, what good is it if you can't spot them in time to invest profit from them? To date, it has been hard to lose money in ARKK, yet that's exactly what I think most ARKK investors have managed to do.

Anyone know where to find "investor return" statistics for ARKK?

Or one of those every-pair-of-dates "heat maps?"
Last edited by nisiprius on Fri Jan 14, 2022 10:38 am, edited 1 time in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by thenextguy »

leonidas wrote: Fri Jan 14, 2022 7:55 am
Hyperchicken wrote: Fri Jan 14, 2022 12:15 am ARKK - You were the Chosen One! It was said that you would destroy total market funds, not underperform them.
"It is the Index funds that are evil"
--Darth ARKK
You joke, but ARKK basically said this! https://twitter.com/Rick_Ferri/status/1 ... 9880050694

Watch the video in Rick's link.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by thenextguy »

nisiprius wrote: Fri Jan 14, 2022 8:11 am Furthermore, practically nobody was talking about ARKK in early 2021.
I don't think this is true at all. Early 2021 was Peak-ARK. Also, look at the date this thread was started.
nisiprius wrote: Fri Jan 14, 2022 8:11 am Anyone know where to find "investor return" statistics for ARKK?
https://www.morningstar.com/articles/10 ... -to-invest
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

HomerJ wrote: Fri Dec 10, 2021 4:43 pm
tsohg wrote: Fri Dec 10, 2021 2:58 pm
1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Your friend's experience sounds like a common one. Can anyone hazard a guess at what the following chart will look like over the next 5 years? My bet would be on massive outflows.

Image
I don't know why people weren't gushing over ARKK at the end of 2017. It was even an opportunity to get in at the end of a fabulous run and not have to wait very long for the next one.
Why are we discussing returns in 2017 when (relatively speaking) no one was invested to achieve those returns? There's a much better chance this fund will cease to exist in 5 years than it will achieve 40% yearly growth. :oops:
See, that's an EXCELLENT graph...

Showing returns from inception from any mutual fund doesn't prove anything...

The VAST majority of investors never see those returns. It's not until AFTER the fund has huge returns, and makes the news feeds, and the top-10 funds of the year lists, THEN the investors pile in.

So not only do they miss the big initial returns, but then they also make it harder for the fund manager to continue to hit outsize returns.

40% a year is possible when you have a smaller fund and you can make big bets on a few select companies.

When you have $50 billion under management, it's a lot harder to find large enough companies that will grow that much. You're investing in all the same large tech companies that every other active tech fund manager is investing in.
Reposting this so Nisi can see when all the money flowed into the fund.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

thenextguy wrote: Fri Jan 14, 2022 8:19 am
nisiprius wrote: Fri Jan 14, 2022 8:11 am Furthermore, practically nobody was talking about ARKK in early 2021.
I don't think this is true at all. Early 2021 was Peak-ARK. Also, look at the date this thread was started.
:oops: I screwed up, I meant 2020.
thenextguy wrote: Fri Jan 14, 2022 8:19 am
nisiprius wrote: Fri Jan 14, 2022 8:11 am Anyone know where to find "investor return" statistics for ARKK?
https://www.morningstar.com/articles/10 ... -to-invest
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Re: Anyone investing in ARKK since it was first mentioned here is now behind VTI

Post by Papajoe56 »

nisiprius wrote: Tue May 11, 2021 5:35 pm I don't know a definitive way to search for postings by date, but I think the first mention of the ARK funds in this forum was made on October 5th, 2020: Is now the time to think about active investing?

Anybody who invested in ARKK after October 5th, 2020, now has less money than they would have had if they had put it into the Vanguard Total Stock Market Index Fund, VTI.

Source

Image

In order to have beaten VTI, a buy-and-hold investor would have had to invest in ARKK before October 5th, 2020. Obviously that was possible, but I don't think very many people had heard of it before then.

Did any readers of this posting buy ARKK before October, 2020?
I bought a little ARKK in late July '20 for $83.58, and sold in early May '21 at $$107.03

I picked up a 28% gain in 9 months.

Glad I got out when I did.

The first trading day in '21 would have been much better, as that is when the decline began.
Last edited by Papajoe56 on Fri Jan 14, 2022 11:08 am, edited 1 time in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

So I have done a little spreadsheet work. Possibly a silly metric but here are the results.

The data I have for ARKK covers single-month growth from 11/2014 through 12/2021 or 86 months.

If you had bought in any randomly-selected month in those 86, and sold in any randomly-selected subsequent month in that entire period, you would have had a 91.2% chance of making money and only an 8.8% chance of losing money.

And it's not a case of negative skew, either. Again, this is a fairly silly calculation but if you had invested $10,000 into ARKK at any random month since inception, and then sold it at any random month subsequently, on the average (plain old arithmetic average) you would have made +41.49%.

My point is not that ARKK is a good investment. My point is that "investing whenever you learn about some really impressive fund" is amazingly bad even when the fund itself has done well.
Last edited by nisiprius on Fri Jan 14, 2022 11:47 am, edited 3 times in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Semantics »

thenextguy wrote: Thu Jan 13, 2022 5:34 pm
atdharris wrote: Thu Jan 13, 2022 2:27 pm
RJC wrote: Thu Jan 13, 2022 2:10 pm About a year ago my friend was telling me how great this fund is. What timing!
I still have family members doubling down as it drops. I can't say that thought has ever crossed my mind.
Cathie Wood can be very persuasive if you listen to her. She can tell a good story. I actually held some of her funds for a short while last year. I only lost a little bit before I realized this was completely against everything I believed!

The problem is that I think she's dead on regarding the impact the "innovation platforms" she always talks about (although I'm not sold on blockchain). BUT that doesn't mean it's easy to invest in.
Indeed, it's not like the rest of the market is oblivious to these technologies and their potential. One thing that seems completely absent from any of her videos is why the mostly small/mid cap stocks SHE picks are going to be the ones to realize the fruits of innovation - why won't all of those profits just be gobbled up by the FAANGs, who are plenty innovative in their own right.

I also haven't heard ARK say much about the management talent at the companies they invest in, which for growth companies is arguably the most important thing to look at.
Last edited by Semantics on Fri Jan 14, 2022 10:57 am, edited 1 time in total.
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Re: Anyone investing in ARKK since it was first mentioned here is now behind VTI

Post by HomerJ »

Papajoe56 wrote: Fri Jan 14, 2022 10:43 am I bought a little ARKK in late July '20 , and sold in early May '21.

I picked up a 29.7% gain in 9 months.

Glad I got out when I did.
Hate to tell you this, but the Total Stock Market Index Fund was up 40% during those 9 months.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by JDave »

ARK has been killing it over the past 12 months!
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Re: Anyone investing in ARKK since it was first mentioned here is now behind VTI

Post by Papajoe56 »

HomerJ wrote: Fri Jan 14, 2022 10:56 am
Papajoe56 wrote: Fri Jan 14, 2022 10:43 am I bought a little ARKK in late July '20 , and sold in early May '21.

I picked up a 29.7% gain in 9 months.

Glad I got out when I did.
Hate to tell you this, but the Total Stock Market Index Fund was up 40% during those 9 months.
I am well aware.

I had many times more in VTI and VOO, than the little I had in ARKK during that time.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by arcticpineapplecorp. »

here's something I just read in IFA's Book "Index Funds":
https://www.ifa.com/pdfs/index-funds-12 ... estors.pdf

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The First Shall Be the Last:

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a picture (or 4) are worth a 1000 words, huh?

another thing to consider is that often a mutual fund varies its style over time (doesn't stay true to its roots). Here's some examples:

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compare the style drift of active mutual funds above with an index fund (below):

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Last edited by arcticpineapplecorp. on Fri Jan 14, 2022 8:38 pm, edited 1 time in total.
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HomerJ
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

Wow, can those graphs be put in the wiki and stickied to the top?!
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Portfolio7 »

I'm out. Bought ARKK and ARKG about 13-14 months ago. :greedy

The interesting thing to me is that I bailed on it after a less than 20% loss, on a tiny sliver of my portfolio.

I understand my core portfolio and the funds in it, and have not had a problem holding them through 27 years and multiple 30% plus drawdowns.

Now, once ARKK was down 20% I was coming to some realizations. Turnover is high, and I realized that maybe they'd just stock it with more high risk stocks, and it could just keep losing and losing. I considered what I would do with spare cash at that moment, and realized I'd drop it in small cap and EM funds I own that are slightly underweighted vs my base AA. So, I sold all my ARK funds and did exactly that.

I have never behaved similarly with my core holdings. I've seen drops almost twice the size of what ARK has experienced without wanting to bail. I thought about it a bit and considered. I didn't understand why I was investing in it, really. I was just buying a lottery ticket. When I started losing money, I just wanted out. I was glad that I kept my purchases so small, but also glad to have gone through the experience. Even an experienced investor can be well served by revisiting the reasons we invest the way we do.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by S4C5 »

I bought ARKK and ARKG in early 2021. I averaged down through the entire year. I got called out of ARKK in the fall on a short sale of call options thank god. Sold ARKG in December for a 30k loss to TLH. Again thankfully. Damn. It’s at 50 now.

Never again.

I got burned by Bruce Berkowitz in the early 2010s and now by Cathie Wood. I’m done with these people.

I wonder if people fleeing crazy Cathy is taking the stocks with it.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by FlatSix »

It will be amusing (to me at least) in the near future the next hot fund manager bursts on the scene after a year of over performance and people will bring up Cathie Wood and ARKK as an example of what typically happens but people will have long forgotten about her (just like the dozens of other fund managers who had their 15 minutes of fame).
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by firebirdparts »

I don't know. I'm kinda thinking when everybody thinks she's dead is when it'll start climbing again. you know how they say in Vegas, luck is bound to change.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Californiastate »

firebirdparts wrote: Sat Jan 15, 2022 2:54 pm I don't know. I'm kinda thinking when everybody thinks she's dead is when it'll start climbing again. you know how they say in Vegas, luck is bound to change.
They also say the casino always wins.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by DarkMatter731 »

The fact that ordinary investors can invest in a managed fund like ARKK should tell you everything you need to know!

Unlike most Bogleheads, I do think that alternative investments can generate meaningful alpha.

But the ones who do are either:

A) Only open to institutional investors. There's no point letting retail invest when institutional investors like pension funds and endowments can invest far more so there are fewer investors to worry about. ARKK is open to retail investors for a reason.

B) Investing their own money only. If the fund is that successful, they probably don't need retail investors.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

DarkMatter731 wrote: Sat Jan 15, 2022 3:12 pm The fact that ordinary investors can invest in a managed fund like ARKK should tell you everything you need to know!

Unlike most Bogleheads, I do think that alternative investments can generate meaningful alpha.

But the ones who do are either:

A) Only open to institutional investors. There's no point letting retail invest when institutional investors like pension funds and endowments can invest far more so there are fewer investors to worry about. ARKK is open to retail investors for a reason.

B) Investing their own money only. If the fund is that successful, they probably don't need retail investors.
????? ARKK isn't what's usually meant by an "alternative investment." As I understand the terminology, "alternatives" means investments other than securities (stocks and bonds). ARKK is a stock investment.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by DarkMatter731 »

nisiprius wrote: Sat Jan 15, 2022 4:48 pm
DarkMatter731 wrote: Sat Jan 15, 2022 3:12 pm The fact that ordinary investors can invest in a managed fund like ARKK should tell you everything you need to know!

Unlike most Bogleheads, I do think that alternative investments can generate meaningful alpha.

But the ones who do are either:

A) Only open to institutional investors. There's no point letting retail invest when institutional investors like pension funds and endowments can invest far more so there are fewer investors to worry about. ARKK is open to retail investors for a reason.

B) Investing their own money only. If the fund is that successful, they probably don't need retail investors.
????? ARKK isn't what's usually meant by an "alternative investment." As I understand the terminology, "alternatives" means investments other than securities (stocks and bonds). ARKK is a stock investment.
Yes, I understand that.

I'm just pointing out that actively managed products that generate meaningful alpha aren't open to the public i.e. alternative investments. I'm not convinced that an ETF like ARKK is going to consistently 'beat' the market when you look at risk-adjusted returns.

Alternatives generally refer to private equity and hedgefund investments.

I'm working at a fundamental fund myself next year, which has consistently beat their benchmark but only open to institutional investors.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by arcticpineapplecorp. »

FlatSix wrote: Sat Jan 15, 2022 10:50 am It will be amusing (to me at least) in the near future the next hot fund manager bursts on the scene after a year of over performance and people will bring up Cathie Wood and ARKK as an example of what typically happens but people will have long forgotten about her (just like the dozens of other fund managers who had their 15 minutes of fame).
Yep. Unfortunately the newbies will ask "Cathie who?"

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

S4C5 wrote: Fri Jan 14, 2022 6:25 pm...I got burned by Bruce Berkowitz in the early 2010s and now by Cathie Wood. I’m done with these people...
FlatSix wrote: Sat Jan 15, 2022 10:50 am It will be amusing (to me at least) in the near future the next hot fund manager bursts on the scene after a year of over performance and people will bring up Cathie Wood and ARKK as an example of what typically happens but people will have long forgotten about her (just like the dozens of other fund managers who had their 15 minutes of fame).
Exactly. What percentage of people reading this know who Bruce Berkowitz is?

:shock: How about that? His Fairholme Fund returned 41% in 2020.

A "telltale chart," described by John C. Bogle, plots the ratio of the cumulative growth of two funds. Basically, it measures the distance between two lines on a semilog growth chart. Despite spectacular early years, and then steady outperformance through 2010, and earning 41% in 2020--the only way a committed buy-and-hold investor could be ahead today--without selling the fund at the right time--would be to have bought the fund before 2002.

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Last edited by nisiprius on Sat Jan 15, 2022 6:06 pm, edited 1 time in total.
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