Bad Ideas Report

As you may know, my family and I own a number of actively-managed, investment theme-oriented ETFs run by Ark Invest. I consider myself an aggressive investor, so I like the focus and the (relatively high, in my view) degree of concentration in what ARK considers its best ideas. My one hesitation–hesitation may be the wrong word, since I own a bunch of ARK products (a risk to keep in mind might be better)–is that a given name may be prominent in more than one ARK products. Square, for example, is a 6% position in both the Ark Innovation and Ark Next Generation Internet funds; it’s also a 12% position in the Ark Fintech fund.

The position sizes don’t bother me, both because I’m aware of them and my younger son has convinced me of SQ’s appeal. The potential worry I see is the interconnectedness of the fund holdings in a time of extreme stress. If say, the Fintech fund were to have heavy redemptions requiring it to sell holdings, that could put some downward pressure on the other two through SQ. Not a worry for today and not a high probability scenario, but it’s my main concern. How to respond? …either be prepared to do nothing or to buy more.

Anyway, ARK has just issued a white paper titled Bad Ideas Report that I think is interesting. I found the autonomous driving sections the most in-depth. My reaction to the physical bank branch part is that this issue has been around since the emergence of the ATM in the 1980s. The US is way behind the rest of the world in consumer banking, so we can see the future just by looking abroad. Yes, this is bad for banks, but how bad?

Wikipedia–what’s happening to you?

Wikipedia is/was a great idea–a crowdsourced encyclopedia, growing and changing with the times.  It’s central enough to the internet culture that if you Google “searchterm wiki” you go straight to the appropriate Wikipedia entry.

Incomplete?  …maybe.  Reliable?  …of course!

My first personal hint that this assessment is incorrect was about a half-decade ago.  One of my MBA students suggested for a project I was supervising that we could improve our client’s reputation by crafting what amounts to a Wikipedia infomercial.  By avoiding being too blatantly commercial, we could write an article that would stake a claim to industry expertise for our client, endorsing him as the de facto “go to” source of information/opinion about his industry.  At the very least, this would improve his Google search positioning.


Since that time, professional reputation “enhancement” services have done further damage to Wikipedia’s reliability, as well as to the usefulness of Google searches in finding out about past shady activities of prominent personalities.

This development came home to me forcefully when I decided to write about Michael Milken, whom I consider to be on a par with Bernie Madoff in the annals of financial wrongdoing.  Googling his name to make sure I had my dates and places correct, I was surprised to find that the top-positioned Google entry heralded Milken as a philanthropist–and said nothing about his criminal past.

To some degree, the press is giving an assist to this Orwellian enterprise of rewriting history.  Many newspaper archives are either only open to paying subscribers or have–for cost reasons, I assume–been truncated to include only stories from, say, the past ten years.  So reputation “defenders” have free rein to reshape the facts for prior periods.

Yes, many of the financial criminals of the past have been barred from direct participation in the securities industry.  And most of the reinventess have resurfaced merely as personalities on cable TV shows or on Yahoo, so in one sense they’re less of a threat to our financial well-being than they used to be.

On the other hand, it;s a little disheartening to find that as altruistic an information source as Wikipedia must also now be taken with a hefty dose of salt.