–Barron’s commented this morning on an unusual letter published by the ARK funds yesterday (I got an email copy, presumably because I’m a former ETF shareholder). The financial newspaper points out out that this is a marketing document, presumably designed to stem redemptions. In it Cathie Wood writes that ARK has “paid the dues associated with higher interest rates” and is now, in her view, in a good position to prosper as rates decline.

What I find odd about the letter: if I understand Ms. Wood’s background correctly, she has spent well over a quarter-century involved in financial markets both as an economist and then as the head of the money management organization she founded ten years ago. How is it that she apparently didn’t appreciate until now that the availability of substitutes is a key determinant of price, in other words, that as interest rates go up stocks tend to go down?

–Nvidia. There’s an article in the Financial Times about the premier AI chip designer. To my mind, the most interesting part is a chart of analyst projections of future earnings. A year ago, the consensus was that the company would earn $1/share in the next fiscal year. The consensus number is now $3. The year-ago guess for fiscal 2029 was $2. Now it’s $6.

Two thoughts: don’t analysts think about operating leverage any more? and how much faith can anyone place in thoughts about what the world will look like five years down the road?

The turn in analyst sentiment, though, (alternatively, the extent to which analysts had blinders on) is amazing.