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 nisiprius »

watchnerd wrote: Thu Mar 18, 2021 3:50 pmBuying in the dip can turn into catching a falling knife.
People are slow to catch on that there's a whole grab-bag of contradictory sayings. You can always feel wise. Simply pick the one that matches whatever you feel like doing.

It's falling and you want to buy? "Buy the dip." "Buy low, sell high."

It's falling and you want to sell? "Don't try to catch a falling knife." "Cut your losses and let your profits run."

It's falling and you don't want to do anything? "Stay the course."

It's rising and you want to sell? "What does up must come down." "Buy low, sell high." "Nobody ever went broke taking a profit." "Bulls make money and bears make money but pigs get slaughtered."

It's rising and you want to buy? "Cut your losses and let your profits run." "The trend is your friend." "You're playing with house money now."

It's rising and you don't want to do anything? "Stay the course."
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Investing Lawyer »

nisiprius wrote: Thu Mar 18, 2021 4:13 pm
watchnerd wrote: Thu Mar 18, 2021 3:50 pmBuying in the dip can turn into catching a falling knife.
People are slow to catch on that there's a whole grab-bag of contradictory sayings. You can always feel wise. Simply pick the one that matches whatever you feel like doing.

It's falling and you want to buy? "Buy the dip." "Buy low, sell high."

It's falling and you want to sell? "Don't try to catch a falling knife." "Cut your losses and let your profits run."

It's falling and you don't want to do anything? "Stay the course."

It's rising and you want to sell? "What does up must come down." "Buy low, sell high." "Nobody ever went broke taking a profit." "Bulls make money and bears make money but pigs get slaughtered."

It's rising and you want to buy? "Cut your losses and let your profits run." "The trend is your friend." "You're playing with house money now."

It's rising and you don't want to do anything? "Stay the course."
Great example why pithy phrases serve no actual utility. Slogans are not an argument. They merely have emotional resonance.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

Investing Lawyer wrote: Thu Mar 18, 2021 9:33 pm
Great example why pithy phrases serve no actual utility. Slogans are not an argument. They merely have emotional resonance.
It's an ARKK thread...isn't emotion part of the story and appeal?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

ARKK now losing to NASDAQ YTD:

Image

Also:

"If you had been willing to incur the ARK Innovation’s increased volatility, you could have made just as much by leveraging an investment in the QQQ. That is, you would have made just as much by increasing your portfolio allocation to QQQ, or by buying it on sufficient margin."

https://www.marketwatch.com/story/the-j ... =bigcharts
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dmcmahon »

watchnerd wrote: Wed Mar 24, 2021 9:45 am "If you had been willing to incur the ARK Innovation’s increased volatility, you could have made just as much by leveraging an investment in the QQQ. That is, you would have made just as much by increasing your portfolio allocation to QQQ, or by buying it on sufficient margin."
Reminds me of an analysis done years ago by a large charitable endowment on VC performance. They were studying a time period that included the tech bubble and bust. Their conclusion was that unless you invested with the top half dozen firms, you'd have been better off in the Russell 2000 with less volatility.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

dmcmahon wrote: Wed Mar 24, 2021 10:08 am
watchnerd wrote: Wed Mar 24, 2021 9:45 am "If you had been willing to incur the ARK Innovation’s increased volatility, you could have made just as much by leveraging an investment in the QQQ. That is, you would have made just as much by increasing your portfolio allocation to QQQ, or by buying it on sufficient margin."
Reminds me of an analysis done years ago by a large charitable endowment on VC performance. They were studying a time period that included the tech bubble and bust. Their conclusion was that unless you invested with the top half dozen firms, you'd have been better off in the Russell 2000 with less volatility.
Wow the shellacking vs NASDAQ continues:

Image


Down -4% so far today.

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

Post by watchnerd »

Bwlonge wrote: Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.

The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.

Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.

What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?
ARKK not looking so hot vs VTI / total market YTD:

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

Post by jarjarM »

watchnerd wrote: Wed Mar 24, 2021 1:39 pm
dmcmahon wrote: Wed Mar 24, 2021 10:08 am
watchnerd wrote: Wed Mar 24, 2021 9:45 am "If you had been willing to incur the ARK Innovation’s increased volatility, you could have made just as much by leveraging an investment in the QQQ. That is, you would have made just as much by increasing your portfolio allocation to QQQ, or by buying it on sufficient margin."
Reminds me of an analysis done years ago by a large charitable endowment on VC performance. They were studying a time period that included the tech bubble and bust. Their conclusion was that unless you invested with the top half dozen firms, you'd have been better off in the Russell 2000 with less volatility.
Wow the shellacking vs NASDAQ continues:

Image


Down -4% so far today.

OUCH
This thread is definitely a shoe boy/jump the shark moment for ARKK. :oops:
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 1789 »

Why can't active manager do better in down turns or in recessions? Isn't that the whole point of active management?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

1789 wrote: Wed Mar 24, 2021 1:59 pm Why can't active manager do better in down turns or in recessions? Isn't that the whole point of active management?
This is when the ARKK shareholders start asking why their "smart" active ETF is losing to dumb NASDAQ index ETFs.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by danrock54 »

1789 wrote: Wed Mar 24, 2021 1:59 pm Why can't active manager do better in down turns or in recessions? Isn't that the whole point of active management?
If that manager has a stated strategy - then he has to stick to it. Why would I buy ARKK with that hefty ER if they got rid of their stocks and bought T-bills ?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

jarjarM wrote: Wed Mar 24, 2021 1:44 pm

This thread is definitely a shoe boy/jump the shark moment for ARKK. :oops:
The timing couldn't have been more comically ironic.

The thread started on Feb 13, right about when ARKK was peaking for the year.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by foodhype »

1789 wrote: Wed Mar 24, 2021 1:59 pm Why can't active manager do better in down turns or in recessions? Isn't that the whole point of active management?
That could have a theoretical justification with Graham-style deep value investing, but ARK is a marketing firm.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

This thread may have to go in the history books for top-calling.

Since the OP's post, it's down 30% almost exactly today. S&P up 0.5%. 8-)
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by txhill »

ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Nathan Drake »

txhill wrote: Mon Mar 29, 2021 11:28 am ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
At this point, if you like ARK, why not just replicate their highest conviction stocks and avoid the fee if there’s going to be minimal diversification?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

txhill wrote: Mon Mar 29, 2021 11:28 am ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
That's... impressive. Considering that normally mutual funds do not invest in more than 10% of the total number of outstanding shares of any single company. They're already allowing themselves double what is allowed for a diversified fund, and they want to go past that?

I also see that although ARK does disclose the fact that it is a non-diversified fund, it seems to me to avoid doing so plainly. Compare the conspicuousness of these two portions of the factsheet. Right near the top, in big type, it's a great "tool for diversification."

Image

The disclaimer--that it, itself, is not diversified--is at the bottom in small grey print. And even there, it is buried! Even if you bothered to glance at the disclaimer, would you even notice the "non-diversification" language if you didn't already know it was there? Count seconds and see how long it takes you to find it.

Image

For comparison, here's how a competitor's fund presents things. These screenshots are all equally scaled.

Image
Last edited by nisiprius on Mon Mar 29, 2021 12:26 pm, edited 2 times in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by imflyboy »

I just saw at least one ARKK ETF is now buying another ARKK ETF. I’m not sure how often this goes on with other funds but it seems like an attempt to prop up a house of cards.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dixdak »

CNBC reports that the second highest holding of the new ARK Space ETF will be their own ARK 3D Printing ETF. A bigger chunk than Lockheed Martin or Boeing.

https://www.cnbc.com/2021/03/29/ark-inv ... esday.html

Why the distain, the OP asks.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

dixdak wrote: Mon Mar 29, 2021 12:34 pm CNBC reports that the second highest holding of the new ARK Space ETF will be their own ARK 3D Printing ETF. A bigger chunk than Lockheed Martin or Boeing.

https://www.cnbc.com/2021/03/29/ark-inv ... esday.html

Why the distain, the OP asks.
I guess they needed to flog that 3D Printer fund somehow, get the AUM up.

Also...Komatsu is on the list?

The Japanese competitor to Caterpillar?

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

Post by firebirdparts »

txhill wrote: Mon Mar 29, 2021 11:28 am ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
Somebody gotta replace Bill Hwang.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by philpill »

YEAR TO DATE RETURNS, 3/29/2021
SWTSX +6.42%
ARKK. - 8.45%
end of conversation
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

firebirdparts wrote: Mon Mar 29, 2021 4:12 pm
txhill wrote: Mon Mar 29, 2021 11:28 am ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
Somebody gotta replace Bill Hwang.
sick burn
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dixdak »

Well, 3D - three dimensional could mean “space”.
Komatsu- umm meteor mining?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

dixdak wrote: Mon Mar 29, 2021 6:12 pm Well, 3D - three dimensional could mean “space”.
Komatsu- umm meteor mining?
Maybe one of those giant tractor things they built to move the Saturn V?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SlowMovingInvestor »

If ARKK is buying another ETF in the family are they at least waiving one set of fees ? Or are they double dipping ?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by drk »

imflyboy wrote: Mon Mar 29, 2021 12:19 pm I just saw at least one ARKK ETF is now buying another ARKK ETF. I’m not sure how often this goes on with other funds but it seems like an attempt to prop up a house of cards.
It's not that unusual. A particularly boring example is Vanguard Total World Bond ETF, which owns the Vanguard Total Bond and Total International Bond ETFs.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SlowMovingInvestor »

drk wrote: Mon Mar 29, 2021 7:07 pm
imflyboy wrote: Mon Mar 29, 2021 12:19 pm I just saw at least one ARKK ETF is now buying another ARKK ETF. I’m not sure how often this goes on with other funds but it seems like an attempt to prop up a house of cards.
It's not that unusual. A particularly boring example is Vanguard Total World Bond ETF, which owns the Vanguard Total Bond and Total International Bond ETFs.
But in case of VG's ETFs that hold other VG ETFs (or VG funds that do likewise), there's only one layer of fees, not 2.

Besides, there's a logic for the VG ETFs holding other ETFs in this case, that sort of escapes me in having Space ETF buy 3D Print ETF :happy
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SlowMovingInvestor »

dixdak wrote: Mon Mar 29, 2021 6:12 pm Komatsu- umm meteor mining?
I assume you mean asteroid mining :happy
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by txhill »

watchnerd wrote: Mon Mar 29, 2021 5:07 pm
firebirdparts wrote: Mon Mar 29, 2021 4:12 pm
txhill wrote: Mon Mar 29, 2021 11:28 am ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
Somebody gotta replace Bill Hwang.
sick burn
Honestly it's true, given how Cathie Wood has said that faith is what led her to create the ARK funds. Here's Bill Hwang with a similar message: https://www.youtube.com/watch?v=vnbeQ-WFOUU

Faith and analytical thinking don't always mix well.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dsasdg »

watchnerd wrote: Wed Mar 24, 2021 9:45 am ARKK now losing to NASDAQ YTD:

Image

Also:

"If you had been willing to incur the ARK Innovation’s increased volatility, you could have made just as much by leveraging an investment in the QQQ. That is, you would have made just as much by increasing your portfolio allocation to QQQ, or by buying it on sufficient margin."

https://www.marketwatch.com/story/the-j ... =bigcharts
Yes, TQQQ is not worse than ARKK.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by unclescrooge »

SlowMovingInvestor wrote: Mon Mar 29, 2021 7:13 pm
drk wrote: Mon Mar 29, 2021 7:07 pm
imflyboy wrote: Mon Mar 29, 2021 12:19 pm I just saw at least one ARKK ETF is now buying another ARKK ETF. I’m not sure how often this goes on with other funds but it seems like an attempt to prop up a house of cards.
It's not that unusual. A particularly boring example is Vanguard Total World Bond ETF, which owns the Vanguard Total Bond and Total International Bond ETFs.
But in case of VG's ETFs that hold other VG ETFs (or VG funds that do likewise), there's only one layer of fees, not 2.

Besides, there's a logic for the VG ETFs holding other ETFs in this case, that sort of escapes me in having Space ETF buy 3D Print ETF :happy
Apparently it also owns Netflix, and Amazon.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by drk »

SlowMovingInvestor wrote: Mon Mar 29, 2021 7:13 pm But in case of VG's ETFs that hold other VG ETFs (or VG funds that do likewise), there's only one layer of fees, not 2.

Besides, there's a logic for the VG ETFs holding other ETFs in this case, that sort of escapes me in having Space ETF buy 3D Print ETF :happy
I'm definitely not saying they're the same, just noting that it's not sketchy ipso facto. Maybe their space projections depend on big advancements in 3D printing. The USS Voyager relies heavily on replicating parts, after all.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by ImUrHuckleberry »

SlowMovingInvestor wrote: Wed Mar 17, 2021 11:30 pm ARKK is so last month, enter MOON

https://www.bloomberg.com/news/articles ... by-10-fold

Around $260M in assets.
And if the cloud bursts, thunder in your ear
You shout and no one seems to hear
And if the band you're in starts playing different tunes
I'll see you on the ARKK side of the MOON
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Annabel Lee »

txhill wrote: Mon Mar 29, 2021 11:28 am ARK funds recently filed to change their prospectus. I find the changes highly concerning. https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm

Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
Or they’re going to start buying options. What could go wrong?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by ElJefeDelQueso »

ImUrHuckleberry wrote: Mon Mar 29, 2021 9:54 pm
SlowMovingInvestor wrote: Wed Mar 17, 2021 11:30 pm ARKK is so last month, enter MOON

https://www.bloomberg.com/news/articles ... by-10-fold

Around $260M in assets.
And if the cloud bursts, thunder in your ear
You shout and no one seems to hear
And if the band you're in starts playing different tunes
I'll see you on the ARKK side of the MOON
That's a great album.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Forester »

ARKK outflows last week $402m against AUM of $21.5bn. 50% of stock under $117 is losing money so most investors who bought in this year are sitting on losses.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

Forester wrote: Mon Mar 29, 2021 11:55 pm ARKK outflows last week $402m against AUM of $21.5bn. 50% of stock under $117 is losing money so most investors who bought in this year are sitting on losses.
Duh.

To quote Beauty and the Beast...

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People chasing performance lose money.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by txhill »

While I did say earlier that everyone should be extremely cautious of ARK because of their excessive risk taking / potential liquidity issues / questionable leadership, I do want to point out that I do think ARK's methodology in selecting disruptive technologies is very interesting and they have had a good track record of picking the right platforms in general. I just think investing in ARK is a bet on everything working out precisely the way they predict according to a very tight timeframe. If they are off on their predictions by even a few years, the funds will tank.

So ARK is too risky for me, particularly given the macro environment, which could at any point turn violently against growth companies. But I have no doubt that autonomous vehicles, genomics, space exploration, etc. will become dominant industries.... someday. And if that someday is soon, then ARK could very well crush everything out there.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Peculiar_Investor »

Bwlonge wrote: Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.

The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.

Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.

What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?

By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.
I've skimmed this topic but haven't read it in much detail because it goes against the core Boglehead's philosophy and I have seen this movie before. Does anyone remember Bill Miller and the Legg Mason Value Trust Fund from 1991 through 2005?

Here's my issue. Using your dates of 2015-2020, where are the 2015 posts about ARKK and Cathie Wood going to outperform over the next 5 or 6 years? I found this one from May 2019 and this one from June 2017. They seem much more like random dart throws than accurate predictions of the future.

"Making predictions is hard, especially about the future" -- attributed to Yogi Berra and/or Niels Bohr.

It is easy to examine outperformance after the fact when the winners are known. It is much harder or near impossible to correctly predict the future winners.

Jack Bogle's The Clash of the Cultures, Chapter 9, Ten Simple Rules for Investors and a Warning for Speculators serves as a reminder. Most, if not all, investors are best served by simply buying Broad Market Index Funds and following the Bogleheads® investment philosophy.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

I've been reading an excellent 2017 book, The One Device: The Secret History of the iPhone, by Brian Merchant, which is not so much about the iPhone specifically, but a wonderfully broad overview of how innovation really happens, and this lept out at me (pp. 174-5). My boldfacing.
To better understand how the App Store might fit into a historical context, I reached out to David Edgerton, a historian of technology at Oxford University. Edgerton is the author of The Shock of the Old, a book that chronicles all the ways that it’s usually old, persistent technologies that mold our lives. Referring to the iPhone and the app economy, he said in an email: “One of the great problems is that practically all changes in the economy in the past decades have been attributed to IT,” meaning information technology. “It has become, rhetorically, sometimes the only cause of change. This is clearly absurd.” He’s talking about the penchant of many financial analysts and economic observers to attribute growth and progress to technology, to the iPhone and the app economy.
This is nothing new, of course. It happened with people (notably Wired magazine) gushing about the supposed "new economy" in 1999, when earnings and profits were said to be a mistaken way to judge companies. It happened with the "-onics companies" in the 1950s and 1960. It happened in the 1920s with the mania for "Radio" and for companies building out the electric power grid.
Last edited by nisiprius on Tue Mar 30, 2021 8:30 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 atdharris »

I don't see an issue with holding some ARKK. I have about 5% of my portfolio in it. If Cathie Wood's thesis is correct, the fund could crush the market for years to come. It's a gamble, but people that buy it should understand it's a gamble. I don't think this current sell-off will last forever. Eventually, the market will rotate back into technology and growth.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

atdharris wrote: Tue Mar 30, 2021 8:29 am I don't see an issue with holding some ARKK. I have about 5% of my portfolio in it. If Cathie Wood's thesis is correct, the fund could crush the market for years to come. It's a gamble, but people that buy it should understand it's a gamble. I don't think this current sell-off will last forever. Eventually, the market will rotate back into technology and growth.
5% isn't going to make or break you either way, so you can swing for the fences without big downside risk.

But some posters in this thread are 39% ARKK, according to their signatures....
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by pokebowl »

ARKX - Ark's Space Exploration and Innovation ETF starts trading today. Not too crazy about the asset mix as there appears no clear pattern in the stock picks, but considering its competition Procure Space ETF (UFO) and SPDR S&P Kensho Final Frontiers (ROKT) are also night and day from each other, perhaps the main issue is no one can clearly define what is the outer space industry at this point in time.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

watchnerd wrote: Tue Mar 30, 2021 9:14 am
atdharris wrote: Tue Mar 30, 2021 8:29 am I don't see an issue with holding some ARKK. I have about 5% of my portfolio in it. If Cathie Wood's thesis is correct, the fund could crush the market for years to come. It's a gamble, but people that buy it should understand it's a gamble. I don't think this current sell-off will last forever. Eventually, the market will rotate back into technology and growth.
5% isn't going to make or break you either way, so you can swing for the fences without big downside risk.

But some posters in this thread are 39% ARKK, according to their signatures....
Yes, I'd never go that far into ARKK. It's premise is good and Cathie definitely rode the TSLA wave to massive gains in 2020. I suppose now we'll see if she's a one hit wonder or if the growth can continue.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by firebirdparts »

nisiprius wrote: Tue Mar 30, 2021 8:24 am I've been reading an excellent 2017 book, The One Device: The Secret History of the iPhone, by Brian Merchant, which is not so much about the iPhone specifically, but a wonderfully broad overview of how innovation really happens, and this lept out at me (pp. 174-5). My boldfacing.
To better understand how the App Store might fit into a historical context, I reached out to David Edgerton, a historian of technology at Oxford University. Edgerton is the author of The Shock of the Old, a book that chronicles all the ways that it’s usually old, persistent technologies that mold our lives. Referring to the iPhone and the app economy, he said in an email: “One of the great problems is that practically all changes in the economy in the past decades have been attributed to IT,” meaning information technology. “It has become, rhetorically, sometimes the only cause of change. This is clearly absurd.” He’s talking about the penchant of many financial analysts and economic observers to attribute growth and progress to technology, to the iPhone and the app economy.
This is nothing new, of course. It happened with people (notably Wired magazine) gushing about the supposed "new economy" in 1999, when earnings and profits were said to be a mistaken way to judge companies. It happened with the "-onics companies" in the 1950s and 1960. It happened in the 1920s with the mania for "Radio" and for companies building out the electric power grid.
Wow, that's a great comment and your comments too.

If we learn anything from that perspective, it might be that competition is pretty ruthless and everybody benefits. Ultimately these companies provide something that everybody wants, and the fact that everybody wants it drags the price down instead of up, if you do it right. We have a history of doing it right. I haven't read "The Birth of Plenty" but it's pretty obvious that philosophy is important to this process.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Keenobserver »

Im glad i took my profits in Feb as I had a good amount in ARKK. Going to leave it alone for now, unless it hits a 100 or less.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by YeahBuddy »

I'd just like to point out that past performance does not guarantee future success and this post was created very close to ARKK's all time high.

ARKK's returns since this post have been about -28%
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by hnd »

i mean i get it but its kind of a little silly to point out a 3 month dip in something and be like "SEE!!! GARBAGE!!"
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by txhill »

I think this video of a Bezos presentation from 2003 is really brilliant. I like to watch it on occasion to remind myself not to dismiss all new technologies out of hand, even if they go through spectacular booms and busts. Some bubbles are the signifier of a sea change, while others are based on truly nothing (or rampant fraud in the case of the 2008 recession). ARK may well be on to some big new things, although I'm not willing to invest in it given the uncertainties in the macro environment and the fact that ARK likely will fail if they miss their predicted timelines by even a handful of years. But just because it has had a bad few months does not mean that ARK's thesis is wrong.

https://www.youtube.com/watch?v=vMKNUylmanQ
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