one

With the caveat that I’m always too early on this sort of thing, it seems to me that the downward momentum is slowing substantially for the speculative stocks that have borne the brunt of recent selling. I don’t think potential sellers have run out of ammunition; I think prices are probably low enough that they think it no longer makes sense to push these stocks down further.

Two reasonable courses of action, I think:

–do nothing, if you’re basically satisfied with your portfolio, or

–look for stocks to buy/add to that have been pulled down by ferocious selling without much reason that this should happen, or that have been beaten down to the extent that either their assets or their potential could be worth more than the current stock price. Peloton (PLTN), for example, is now down from its high of $171 to around $37 as I’m writing this. I’m not sure it can be a winner with current management, but it might be a bet on change of control–a standard “value” strategy.

two

I read yet another article beating up on Cathie Wood. This is the second time I’ve heard the story that in all likelihood more money has been lost from holding the ARK flagship fund, ARKK, than has been made over its history. Yes, this may be true and, yes, fifty percentage points below the S&P 500 in a bit less than a year is a stock market calamity for the ages. But the reality is that investors of all stripes, both institutional and retail, chase performance. That is, by and large they buy high and sell low. The amounts of money at stake in the ARK case may be unusually large, but the total losses being greater than total gains isn’t the shocker it is being presented as.

At the same time, the financial press also seems to me to behave the same way: to chase rather than anticipate. If anything, these negative stories could be seen as another sign of the bottom for ARKK stocks.

The real question for holders of ARK funds (I’m one), I think, is whether Ms. Wood can/will/wants to modify her investment style. If she can’t/won’t/doesn’t want to, then my approach should be to treat her funds like individual stocks and take on myself the task of judging whether the contents are cheap of expansive–rather than leave this portfolio management task to her.