Cathie Wood has become a hero for many new Reddit retail investors -- and she's garnered respect from longtime at-home traders and investors, too.
But that hero status may be taking a hit. Investors have recently pulled around $2.7 billion from Wood's ARK funds, according to data from FactSet. This comes after Wood's funds raked in $20 billion in 2020.
Why the change of heart? Perhaps it's because of the negative pressure and forays that have yet to work out for Ark. For example, Teladoc (TDOC) is down over 33% in the past year. TDOC makes up for about 6% of the Ark Innovation exchange-traded fund (ARKK) .
But where there's pain, there's also gain. In 2020, the Ark Innovation ETF soared over 150%. Tesla (TSLA) is an obvious success story for Wood, but there's also Roku (ROKU) -- up over 123% in the past year.
There's an abundance of hot takes around Wood's and Ark's investment strategies, but one question stands out: What do retail investors really think?
The general consensus from the group of retail investors with whom I spoke for this story is that Wood and Ark are transparent. They called Wood one of the few on Wall Street who is honest and open.
"Her conviction has a lot to do with her success. They're very open on what they're doing and why they're doing it," one investor said.
Another told me that, "She's one of the few major players on Wall Street that understands how quickly the world is about to change. Innovative technology leads to more rapid change and new technologies. COVID accelerated a lot of the disruptive technologies that she's into and I believe that the numbers that folks like (Jim) Cramer look at will catch up and exceed expectations in the next three to five years."
But some investors have felt the pain of investing in some of Ark's bigger names. Investor Gary Meshell, for example, cautioned that he's "gotten burned" by his blind faith in Wood -- whom he's been following closely since 2018.
"That blind faith isn't as strong as it used to be. That's not saying I still don't respect what she's doing, but it's clearly no longer 'let's just put the chips where Cathie's going,'" he said.
Meshell pointed out that he admires Wood's transparency and selflessness. He also likes how Wood doesn't respond to "baiting" from Wall Street pundits.
But it's not just Wood's personality that motivates the retail crowd to stay with her -- though it's clear that she inspires investors to lick their wounds and move on when it comes to investments that haven't panned out.
"My investing strategy has definitely been influenced by her. I have found myself dumping some of the more archaic stocks and taking some risks and jumping into some of the types of science-based stocks ARK seems to be circling around, and it is paying off for me personally," another investor, Adam Orth, said.
Investors say they still believe in Wood's strategies, especially when it comes to her understanding of industry disruption, despite the losses.
With famous Wall Streeters such as Michael Burry, who bet against the housing bubble back in 2008, siding against Wood financially, it's still an open question of whether Wood is ahead of her time. But for the retail crowd, who believe in her ideas and put their money where her mouth is, Wood isn't to be written off just yet. And perhaps investors will see history repeat itself once again, since Wood called Tesla back in 2018, giving the stock an $800 price target when it was trading at a mere $70 a share.
Real Money's Stephen Guilfoyle, who holds a long position in ARKK, says he does it to "hedge against [his] own bias."
"[Wood] certainly has an incredible tolerance for risk. Know what? If she can repeatedly do what she did last year, she's ahead of her time. If she ultimately crashes and burns, she was just a risky trader. History, as it always does, will write the story," Guilfoyle said.
