This tells you why the impending correction will be so herky-jerky, prolonged and painful. It seems that the legions of true believers molded by a decade of Fed coddling are still sending cash to the casino—even to Cathie Wood!
Unbelievable, but true. As the Wall Street Journal noted over the weekend:
Cathie Wood’s ARK Innovation exchange-traded fund keeps falling, but investors aren’t jumping ship.
Shares of the popular ETF, which is known by its ticker ARKK, have declined 45% so far in 2022—including 21% in April alone—as rising interest rates punish stocks that are valued on the prospect of robust future growth.
……..Despite the drawdown, investors haven’t fled ARKK. Instead, they have funneled more than $658 million into the fund this year, according to FactSet data through Thursday, including about $59 million in the latest week.
That’s right. And you can lay this hideous bit of nonsense right at the doorstep of the Fed. After all, Ms. Wood was an undistinguished has-been money manager who suddenly shot to prominence in 2020, when ARK’s shares soared more than 200% as the Fed slashed interest rates to near zero and investors loaded up on risk. The S&P 500, by comparison, rose 16% that year.