WEBVTT - Bloomberg Talks: Ark Invest CEO & CIO Cathie Wood (Podcast)

0:00:02.520 --> 0:00:07.920
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, the.

0:00:07.960 --> 0:00:10.920
<v Speaker 2>ARC and Vest CEO Kathy would one of Tensela's biggest bulls,

0:00:10.920 --> 0:00:13.880
<v Speaker 2>the ev Maaker, the top holding in her flagship Art

0:00:13.960 --> 0:00:17.040
<v Speaker 2>Innovation ETF, has this to say, I do not understand

0:00:17.040 --> 0:00:19.520
<v Speaker 2>why Vest is a voting against Elon's pay package when

0:00:19.560 --> 0:00:22.400
<v Speaker 2>they and their clients would benefit enormously if he and

0:00:22.480 --> 0:00:25.560
<v Speaker 2>his incredible team meet such high goals. Kathy joint us

0:00:25.560 --> 0:00:27.120
<v Speaker 2>Now for more, Kathy, thanks for making some time for

0:00:27.160 --> 0:00:29.800
<v Speaker 2>us this morning. Good morning to you all. Do you think, Kathy,

0:00:29.840 --> 0:00:31.720
<v Speaker 2>the incentives are well aligned?

0:00:33.680 --> 0:00:38.920
<v Speaker 1>Yes, we do. I do not believe any company anywhere

0:00:38.960 --> 0:00:45.040
<v Speaker 1>near this size has ever delivered a compound annual rate

0:00:45.280 --> 0:00:48.920
<v Speaker 1>of growth for ebit dot, which is a bottom line

0:00:49.000 --> 0:00:53.760
<v Speaker 1>number of forty one percent over ten years. No company

0:00:53.760 --> 0:00:57.200
<v Speaker 1>has done that. So yes, indeed the incentives are aligned.

0:00:57.280 --> 0:01:01.240
<v Speaker 1>If he and his team are able to deliver on

0:01:01.280 --> 0:01:05.880
<v Speaker 1>that number, the stock is going to outperform enormously.

0:01:06.480 --> 0:01:10.880
<v Speaker 3>Kathy, If by chance this proposal is rejected, would you

0:01:10.920 --> 0:01:12.759
<v Speaker 3>consider shedding some of your TESLA position.

0:01:15.319 --> 0:01:19.680
<v Speaker 1>So I'm happy that the prediction markets are at ninety

0:01:19.800 --> 0:01:22.479
<v Speaker 1>to ninety five percent in terms of this is going

0:01:22.520 --> 0:01:26.280
<v Speaker 1>through so we don't have to think about that clearly.

0:01:26.319 --> 0:01:30.480
<v Speaker 1>If Elon left, we think about it in two ways. One,

0:01:30.600 --> 0:01:35.720
<v Speaker 1>we think robotaxis, he has them at the starting gate

0:01:35.760 --> 0:01:39.440
<v Speaker 1>as of June, and now they're rolling out, and that

0:01:39.640 --> 0:01:44.800
<v Speaker 1>AI project is well underway. If he had left five

0:01:44.880 --> 0:01:48.320
<v Speaker 1>years ago, three years ago, it probably wouldn't be anywhere

0:01:48.360 --> 0:01:52.280
<v Speaker 1>near where it is. What we now think, though, is

0:01:52.320 --> 0:01:56.640
<v Speaker 1>in order to capitalize on humanoid robots, which that's a

0:01:56.760 --> 0:02:03.040
<v Speaker 1>much more difficult project. Yes, Elon's brilliance and the team

0:02:03.200 --> 0:02:07.920
<v Speaker 1>he has attracted around him are going to be necessary

0:02:08.040 --> 0:02:11.320
<v Speaker 1>to pull that off. Our price target twenty six hundred

0:02:11.680 --> 0:02:16.680
<v Speaker 1>dollars in twenty thirty is ninety percent of that valuation

0:02:16.960 --> 0:02:21.240
<v Speaker 1>is ROBOTAXI. We have very little for humanoid robots. If

0:02:21.320 --> 0:02:27.520
<v Speaker 1>humanoid robots evolve as quickly as Elon things. Now, remember

0:02:27.600 --> 0:02:30.840
<v Speaker 1>that's Elon time, but he already has a running start

0:02:30.960 --> 0:02:37.519
<v Speaker 1>because robotaxis are robots, they're electric, they're powered by AI.

0:02:37.880 --> 0:02:41.400
<v Speaker 1>Those are the three innovation platforms that will power humanoid

0:02:41.480 --> 0:02:44.040
<v Speaker 1>robots as well. So he's ahead of the game on

0:02:44.040 --> 0:02:46.480
<v Speaker 1>that one as well. But I do believe he's the

0:02:46.560 --> 0:02:49.400
<v Speaker 1>right leader to bring that part of the story to

0:02:49.480 --> 0:02:50.079
<v Speaker 1>life as well.

0:02:50.160 --> 0:02:51.800
<v Speaker 2>Kathy, I've got to watcher this though. To follow up

0:02:51.800 --> 0:02:55.040
<v Speaker 2>on Lisa's question, if you wouldn't sell if he wasn't CEO,

0:02:55.919 --> 0:02:57.840
<v Speaker 2>then why should we pay him that much to be

0:02:57.919 --> 0:02:58.400
<v Speaker 2>the CEO.

0:03:00.800 --> 0:03:05.280
<v Speaker 1>What I'm saying is we would feel comfortable with the

0:03:06.000 --> 0:03:09.560
<v Speaker 1>ROBOTEXI part of the model, but we would not be

0:03:09.600 --> 0:03:13.880
<v Speaker 1>able to build with confidence the humanoid robot part of

0:03:14.040 --> 0:03:18.520
<v Speaker 1>the model. So over time, of course, as the story

0:03:18.880 --> 0:03:22.440
<v Speaker 1>would depend more and more on that leg of the story,

0:03:22.680 --> 0:03:24.360
<v Speaker 1>we would be taking our position down.

0:03:24.639 --> 0:03:27.720
<v Speaker 3>You talked earlier, Kathy, in the past couple of days

0:03:27.880 --> 0:03:30.800
<v Speaker 3>about this reality check that's going on in the tech sector,

0:03:31.320 --> 0:03:33.960
<v Speaker 3>and I understand that Tesla is sort of in its

0:03:34.040 --> 0:03:36.760
<v Speaker 3>own place that you do hold them for the long term.

0:03:37.240 --> 0:03:39.800
<v Speaker 3>How do you understand the reality check that's currently going

0:03:39.920 --> 0:03:42.840
<v Speaker 3>on within a lot of the biggest tech stocks, and

0:03:42.880 --> 0:03:45.320
<v Speaker 3>this sense of skepticism about whether they can keep growing

0:03:45.360 --> 0:03:48.800
<v Speaker 3>at that rate versus the long term bullish bet.

0:03:50.600 --> 0:03:53.560
<v Speaker 1>You know, I'm really happy that there is so much

0:03:53.600 --> 0:03:56.840
<v Speaker 1>skepticism out there. Anyone who went through the late nineties

0:03:57.720 --> 0:04:01.760
<v Speaker 1>will remember there was no skepticism, and we had valuations

0:04:02.200 --> 0:04:06.120
<v Speaker 1>based on the number of eyeballs on a website maybe

0:04:06.200 --> 0:04:11.200
<v Speaker 1>ten years from then. We're not seeing that right now.

0:04:11.240 --> 0:04:14.640
<v Speaker 1>We are seeing Wait a minute, they're spending a lot

0:04:14.640 --> 0:04:19.000
<v Speaker 1>of money on these data centers. This is a little

0:04:19.000 --> 0:04:22.359
<v Speaker 1>bit of a different story than I was investing in,

0:04:22.440 --> 0:04:25.280
<v Speaker 1>certainly in terms of when I say I the average

0:04:25.320 --> 0:04:29.400
<v Speaker 1>investor was investing in with the mag six, those were

0:04:29.520 --> 0:04:36.880
<v Speaker 1>just cash cows and had huge cash positions. Something's changing here.

0:04:37.040 --> 0:04:43.600
<v Speaker 1>It's making the typical investor a little more I'll say skeptical.

0:04:44.360 --> 0:04:47.760
<v Speaker 1>This is not just the cash register ringing anymore. This

0:04:47.920 --> 0:04:50.960
<v Speaker 1>is wait, a big bet on the future. So I'm

0:04:50.960 --> 0:04:53.120
<v Speaker 1>happy there's skepticism. I think it's a good thing.

0:04:53.360 --> 0:04:55.560
<v Speaker 3>Are you buying right now? Are you seeing a skepticism

0:04:55.560 --> 0:04:58.000
<v Speaker 3>as a chance to build some of your portfolio?

0:04:59.200 --> 0:04:59.479
<v Speaker 2>Oh?

0:04:59.520 --> 0:05:04.920
<v Speaker 1>Sure, you know. And probably the most undervalued part of

0:05:04.960 --> 0:05:09.160
<v Speaker 1>our portfolios is in life sciences healthcare, because we think

0:05:09.680 --> 0:05:14.120
<v Speaker 1>that is going to present the most profound application of

0:05:14.720 --> 0:05:19.320
<v Speaker 1>AI out there, and yet it is highly underappreciated because

0:05:19.920 --> 0:05:22.680
<v Speaker 1>you know, healthcare analysts aren't comfortable with tech, and tech

0:05:22.680 --> 0:05:26.120
<v Speaker 1>analysts aren't comfortable with healthcare, and you know, we've got

0:05:26.120 --> 0:05:29.080
<v Speaker 1>a very siloed ecosystem in terms of the way research

0:05:29.160 --> 0:05:33.400
<v Speaker 1>is done at ARC. We're very focused on the technologies

0:05:33.440 --> 0:05:36.120
<v Speaker 1>first and how they're going to scale across sector. So

0:05:36.160 --> 0:05:39.960
<v Speaker 1>our analysts are organized by technology and we think there's

0:05:39.960 --> 0:05:41.279
<v Speaker 1>a huge inefficiency there.

0:05:41.480 --> 0:05:43.520
<v Speaker 2>Kathy, thanks for being so generous with your time this morning.

0:05:43.560 --> 0:05:46.120
<v Speaker 2>We appreciate it. Counthy, with that the unconvested CEO only

0:05:46.200 --> 0:05:47.880
<v Speaker 2>on mask of Tesla, and a whole lot more