0:00

Hey, welcome to the Cardone

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comment.

0:29

Love to see what you're talking about. Get ready

0:32

for today's show.

0:36

One thing I do in interviews is I try not to study

0:38

a person too much because

0:40

then it gets me all kind of lost in other

0:43

things you've been asked. So I'm just going to ask

0:45

you some things I'm interested in about you, all right?

0:48

How does a woman, like it's predominantly

0:51

a male

0:51

space, is that right? So

0:55

like what percentage of the finance

0:57

community is women? Gosh, I don't

0:59

know the answer to that. When I started,

1:01

which was a very long time ago, there were very

1:04

few women. Then we went through

1:06

the 80s and 90s and the big bull

1:08

market then, and we saw

1:10

a lot of women entering the business,

1:13

which was fantastic. And

1:15

then we had the tech and telecom bust, and

1:18

last in, first out, a lot of women

1:20

left. And then we start

1:22

again, and we get to 08,

1:25

09, same thing, last in, first out. So very

1:27

often I will be one of the few

1:30

women still in meetings. It

1:32

is quite surprising.

1:33

Yeah. And so how do you, like,

1:36

because men don't understand this, right, phenomenon,

1:39

like what it's like to be in a room where you're the minority

1:41

in the room. How do you move in?

1:44

How does a woman

1:47

operate in that space? I mean, do you have any advice for

1:49

the women here? Because you're in a very alpha

1:52

space in finance. Well,

1:54

a couple of things. In the space,

1:57

I've had incredible mentors.

2:00

Many of them men, some women. And

2:04

so definitely go look for that

2:07

mentor. Make sure that you're

2:10

partnered in essence with someone

2:13

whom you believe

2:15

will allow you to grow. And it's a

2:17

little bit of a quid pro quo. What

2:20

as, you know, when I was starting in business

2:22

it was, what was my objective? My

2:24

objective, when you're very young, you think

2:26

you know how the world works. And

2:29

Art Laffer, for those of you who know Laffer

2:32

Curve, Supply Sida, Economics, he

2:34

was my professor at USC. And

2:37

I thought I knew how the world worked.

2:40

And I was going to go in and make Don

2:43

Conlon, the chief economist at the time, look brilliant.

2:47

And that's, you know, I met your, I

2:49

had the pleasure of meeting Sabrina

2:52

and watching- Scarlet. And watching

2:55

Scarlet. No, I met Sabrina

2:56

backstage. Okay, got it. And, you

2:59

know, they have it. I can tell they have

3:01

it. So you're doing

3:03

something right, Elena and Grant.

3:07

Thank you. But I think it's imbuing

3:09

them with that confidence. You know, I was

3:11

born the first,

3:13

I was the first born

3:15

of Irish immigrants. And

3:20

they always treated me as the

3:22

first born son. Meaning,

3:25

meaning I could do anything.

3:28

I put my mind to, I think it's so important

3:30

for parents to believe in

3:32

their children, to encourage them,

3:35

to give them, you know, growth opportunities

3:38

to find themselves and so forth.

3:40

Yes. Yeah. All right.

3:44

And let me, would you recommend

3:46

that people, the kids today, would

3:48

you recommend these kids, a bunch of the kids that

3:50

are helping us out with our security and

3:52

stuff, would you recommend finance as

3:54

a

3:55

place for people to go and work today? Well,

3:59

I, I'm going to answer that

4:01

in two ways. The business

4:03

I joined back in

4:05

the late 70s when I was in college

4:07

in early 80s, the

4:10

business I joined, I joined because

4:12

I said, oh my gosh,

4:14

the world is my oyster.

4:16

The world is our oyster. They're

4:19

paying me to learn how the world's going

4:22

to work. And so

4:24

I just was completely taken with the

4:26

business. Today, the

4:29

business is very different today and

4:31

it is because of the tech and telecom bust and

4:33

then the 0809 meltdown. The

4:36

traditional asset management world

4:39

is playing at what they consider

4:42

safe. I

4:44

think they're taking a terrible risk

4:46

by investing in line

4:49

with benchmarks. You're talking about the ETF,

4:51

so the vanguards. I'm talking about, yes, I'm

4:53

talking about the public equity markets.

4:56

Stocks are listed on the various exchanges

4:59

and there are benchmarks out

5:01

there like the S&P 500, the

5:03

NASDAQ, the MSCI

5:06

world. And many investors now

5:09

hug those benchmarks.

5:12

They say, okay, I'll be a little bit more

5:14

of this and a little bit less of that. That's

5:17

not investing in

5:19

my world. In our world

5:22

at ARK Invest, we're very

5:24

focused on understanding how the world

5:26

is going to work, not the

5:28

way it has worked. Benchmarks

5:31

and the stocks at the top of benchmarks are

5:34

there because of

5:36

some great success historically.

5:39

But if we're

5:39

in a world of disruptive

5:41

innovation, the likes of which we have

5:43

not seen in more than 100 years, then

5:47

the risk is that the traditional

5:49

world order is going to be disrupted.

5:52

So that is not a place of safety.

5:54

But the reason that happened was the

5:56

tech and telecom bust, 0809 and...

5:59

feelings of career risk and business

6:02

risk. So a very defensive

6:04

posture. And yet all of this

6:07

innovation, the seeds of which were

6:09

planted in the 20

6:10

years that ended

6:12

in the tech and telecom bubble, those

6:16

seeds have been germinating and they

6:19

are beginning to flourish. And

6:21

so this very defensive posture is

6:24

inconsistent

6:25

with the possibilities

6:28

ahead. So the disruptive space

6:30

that like you're looking for, you're

6:32

not looking at what happened.

6:34

No. You're looking, because some of the stuff

6:37

that you do, I'm like, okay, when

6:40

did they start making money? How does somebody

6:42

have the courage to invest in

6:44

something that hadn't happened?

6:46

How do you do your due diligence? Yes.

6:49

And then lastly, how do you make

6:51

a bet and sleep

6:54

well at night? Like, I'm a coward

6:56

real estate guy. And

6:59

you're betting on companies that, how

7:02

do you do that? So ARK

7:04

Invest and all of our ETFs,

7:06

which you mentioned, so ARKK, ARKW,

7:10

all of those are in the public

7:12

equity markets but

7:14

we call ourselves the closest

7:17

you'll find to a venture capital company

7:20

in the public equity markets where

7:22

stocks are listed on exchanges. And

7:25

our due diligence is centered

7:27

around something called rights

7:29

law, which is a relative of Moore's

7:32

law. Okay. So what we're

7:34

trying to figure out is how quickly

7:36

the costs associated with these new

7:38

technologies are going to fall and

7:41

how quickly those cost declines will

7:43

turn into price declines, which

7:45

will enable these new technologies

7:48

to scale across sectors. So

7:50

we're looking at mass market opportunities

7:52

caused by technologically

7:55

enabled innovation that can be measured.

7:57

The cost declines can be measured.

7:59

We're very methodical about that.

8:02

And just to give you a few examples, artificial

8:05

intelligence costs today are

8:07

dropping at, if

8:10

you combine hardware and software, 70% per year.

8:13

How much? 17, okay.

8:17

Oh, seven zero. Seven zero, 70%.

8:21

Yes. And we

8:23

see robotics costs for every cumulative

8:26

doubling in the number of robots produced, dropping 50%.

8:31

We're seeing battery costs down 28% on the

8:33

same basis. So

8:36

we center our research on that. And it is,

8:39

and we're able to tell when costs will be

8:41

able to fall to low enough

8:43

levels that the general

8:46

public will be able to afford them and become

8:48

very interested and we can scale and

8:51

enjoy exponential growth trajectories.

8:54

So you're talking Tesla then. Yes. And

8:57

electric vehicles. How does that affect General

8:59

Motors competing with the Tesla? Does it

9:01

help General Motors or does it

9:03

benefit

9:04

Tesla? So Tesla

9:07

is first and foremost electric

9:10

and autonomous. Those

9:13

are the two big opportunities that

9:16

Tesla is pursuing.

9:18

General Motors has a problem.

9:21

Its business has been centered on

9:24

the internal combustion engine.

9:26

And we believe that

9:28

electric vehicle costs and prices

9:31

are going to drop well below gas powered

9:34

car prices. Already the total cost of ownership

9:37

is lower. And so

9:40

GM has to make two giant

9:42

leaps, one from the internal combustion.

9:44

They're gonna kill that. To batteries. The

9:46

assembly line. But that's kind of tough.

9:50

100 years culturally

9:52

in that world. And I have to give

9:55

Mary Barra a lot of credit. When

9:57

I on a news program said, No,

10:00

we think the traditional auto manufacturers

10:03

are going to,

10:04

if they're going to be around, they're

10:07

not going to look anything like they do now. So

10:09

she actually called us and wanted

10:11

us to go visit, see what they're doing in electric

10:14

and autonomous. And to

10:16

GM's credit, they bought a company

10:18

called Cruise Automation. And

10:21

it has gone autonomous

10:23

in San Francisco, now Austin

10:26

and Arizona.

10:28

So they're trying, but

10:31

it is, it's Herculean.

10:33

Yeah, you're saying so they're labored,

10:35

the assets they had in the 60s, 70s and 80s become

10:39

liabilities now. Yes. They

10:41

carry a lot of debt. Stranded assets.

10:42

Stranded assets. So what do they do with

10:45

those assets? Do they abandon them? Well,

10:47

ultimately when you get into

10:49

disruption like this, what happens is

10:52

the incumbents say,

10:55

all right, like take online retail

10:57

when Amazon came along.

10:59

Well, look at Walmart today,

11:01

it's bigger and better and it has an online

11:04

arm. You have a few very

11:06

big survivors because the

11:09

world that's being disrupted consolidates

11:12

and restructures. And

11:14

we think in banking, it's going to be the same. You've

11:17

got digital wallets we think

11:19

are going to really

11:22

disintermediate. Oh, there we go.

11:24

There's some digital wallets back there. Digital

11:26

wallets will disintermediate traditional

11:29

banking. And we

11:31

see a JP Morgan and some others,

11:34

Bank of America, very focused on technology

11:36

and

11:37

trying to make sure that they do

11:39

not lose. So we will see a lot of consolidation

11:42

and restructuring in the traditional world.

11:44

So you mentioned the new world order.

11:46

So how does all this electrical,

11:50

the robots, how does this kind

11:53

of play into that, the

11:55

plus and the minus of a

11:57

new world order? And how does it affect?

12:00

these business owners. So we

12:02

just put out a report called Big Ideas 2023.

12:06

It's on our dash invest dot com. And

12:08

you can see the building blocks. We

12:11

believe right now in the

12:13

global equity market so public

12:15

and private that truly

12:18

disruptive innovation is valued

12:20

at about 13 trillion dollars. So

12:23

that's a little. It's around 10

12:26

percent of the total global equity

12:28

markets. We believe that 13

12:30

trillion dollars is going to scale

12:33

because we are ready for prime time

12:35

in in genomics which

12:38

we call multi-omics now

12:40

in which is what is multi-omics

12:42

includes DNA RNA

12:45

protein sequencing. OK we're really

12:47

beginning to understand the causes

12:49

of disease.

12:50

You're not talking about the vaccine right now. You're talking

12:52

about we're talking about curing disease.

12:54

OK. Editing genes. OK. Now

12:56

we can. Yes. Isn't it exciting.

12:59

Yes. So multi-omics

13:01

sequencing robotics energy

13:05

storage artificial intelligence and

13:07

blockchain technology. Those five platforms

13:10

which involve 14 different technologies

13:12

are going to scale from 13 trillion to 200 trillion. Oh

13:14

my gosh.

13:16

Twenty thirty. That's a 40 percent compound

13:19

annual rate of return which is a spectacular

13:22

growth rate. Now you you talk

13:25

about 10 X. This is yet. Yeah. 10

13:27

X. So if these

13:30

strategies are our strategies

13:32

and I'm saying if I have a very

13:34

strong compliance department here right. If

13:38

if our strategies were to

13:40

scale 40 percent

13:42

per year on average and that

13:44

and that's just the average. Hopefully

13:47

we're better than that. It would take

13:49

six point eight years to 10 X.

13:53

Whereas for traditional stocks

13:55

now historically the S&P 500 has delivered.

13:59

a compound annual rate of return of 7%. That

14:04

would take 78 years to 10x, I believe. No,

14:08

no, that's, cash would take 78 years, 34

14:10

years to 10x. So.

14:13

I don't wanna wait 34 years. Getting

14:16

on the right side of change is so critically

14:19

important because the changes

14:21

are so enormous.

14:23

Sharon, you shared with me

14:25

about what Amazon was doing with robotics,

14:28

robots per employees. And I

14:30

had never heard those numbers. Will you share them?

14:33

Today, Amazon has more

14:35

than 500,000 robots and

14:37

more than 1.5 million employees,

14:40

roughly. So their

14:43

robot penetration per 10,000 people is 3,200.

14:48

If you look at the manufacturing world

14:51

in the United States, if you look at manufacturing,

14:54

that number is only 140. We

14:58

haven't even begun the movement towards

15:00

robotics, but now the convergence

15:03

of artificial intelligence and

15:05

robotics and

15:08

the sensor technologies, where

15:10

we'll be covering robots with sensors so we can

15:12

work alongside them, we

15:14

think is going to transform the

15:16

world completely. And it's going to help us with

15:19

the massive labor shortages around the world.

15:20

So what does this do to labor? Like

15:23

to me, this threatens an

15:26

explosion of unemployment. No, the

15:29

history of technologies, it is a

15:31

net job creator. Now

15:34

there is this space.

15:34

Give me an example, why would a new technology?

15:37

So the internet in the early 90s, we

15:39

were trying to figure out, okay, what's going

15:41

to happen here? And we

15:44

would have never dreamt

15:46

of Uber and Lyft or Airbnb, but

15:49

they could not exist without

15:51

the internet, right? But

15:54

we weren't thinking about it. They didn't even come

15:56

along for 15 or 20 years. So,

15:59

The human ingenuity is

16:02

amazing. But what about when they get rid of the

16:04

Uber driver? If we ever get

16:06

autonomous. And we will. We're

16:09

much- You're convinced the autonomous is gonna happen. Absolutely

16:11

convinced. Because my wife does not trust

16:13

me driving. Well, and she,

16:16

we are going to consider automobiles

16:19

weapons of mass destruction about 10 or 20

16:21

years from now. I can't believe

16:24

that as a 16 year old, my parent,

16:27

when I was 16 year old, my parents

16:29

let me drive that weapon of mass

16:31

destruction. Right? And

16:33

this is-

16:34

You were a bad driver or? So I was

16:36

a teenager. Right. I took

16:39

risks. Yeah, yeah. But there

16:41

are 45,000 people die in the United States because

16:45

of auto fatalities. 80 to 90%

16:48

of them are because of human error. And

16:51

that number in the world is 1.5 million.

16:54

So yes. Wow. So this is going

16:56

to save lives. Innovation solves

16:58

problems. Innovation solves problems.

17:01

So what do you say to the critics, to those

17:03

that are like, okay, she's too aggressive.

17:05

She takes too many risks. She's too

17:07

in the future.

17:09

The funds down. Like when you have those moments and

17:11

it's down or it's up, like how do you handle

17:13

the critics, the naysayers, the haters?

17:15

Well, it actually, it

17:17

actually in a strange way makes

17:19

me feel better because being

17:22

in the tech and telecom bubble was extremely

17:25

uncomfortable. We knew that

17:27

valuing companies on the number of

17:29

eyeballs they might have watching them

17:32

in 10 years was wrong.

17:34

And today, and

17:38

the reason that bubble happened is the

17:40

internet lit a fire, the

17:43

genomic revolution, personalized metam... But

17:45

the technologies weren't ready. The

17:47

costs were too high. Now

17:50

the technologies are ready. The costs

17:52

are too high. What happened back then? Investors

17:54

just chased the dream, but

17:56

it ended badly. Now they're running

17:58

away from the reality.

17:59

And we think that

18:02

is going to end badly as well. So

18:06

you're talking about what happened with crypto

18:08

then recently that pull back the

18:10

NFT. Were you a proponent of the

18:12

NFT space and are you now still

18:14

are. Yes. NFT space. Let

18:19

very much so know the crypto

18:21

revolution. Yeah. Yes. Yes.

18:22

Talk to me. How many crypto people here? Oh

18:25

my God. We

18:27

got some cryptos.

18:28

Three revolutions in one. We've

18:31

got the money revolution. That's really

18:33

Bitcoin and ether.

18:36

And that is what Art

18:38

Laffer, my mentor said. Oh my

18:40

gosh. This is the

18:43

this is the rules based monetary

18:45

system I've been waiting for since

18:47

we went off the gold exchange standard in the early 70s.

18:51

It's a very big idea. Then we've

18:53

got the financial services revolution. FTX

18:56

has certainly heard it. But what was FTX? Man

19:00

free did not even like Bitcoin. He

19:03

didn't like it because it

19:05

was too decentralized to transparent

19:08

and he couldn't control it. FTX

19:10

was completely

19:10

opaque

19:12

and centralized. It almost

19:15

proves the point that

19:18

this movement towards decentralization

19:20

and transparency is

19:22

the wave of the future. You think DeFi

19:25

it is. We're convinced

19:27

of it. DeFi has had a setback.

19:30

But this is what always happens

19:32

early in the internet.

19:34

It didn't go away. And

19:37

then the third revolution is digital

19:40

property rights. That as

19:43

an economist by training there

19:46

is nothing like property rights

19:48

to raise people and countries out of

19:50

poverty. This is digital

19:52

property. And are

19:54

you saying like the properties that I

19:56

buy I would digitize those and be there.

20:00

there's going to be the digital and the physical

20:02

world will be meeting each other. But, and if you-

20:04

This is amazing. I can't even think with

20:07

that. How does that happen? How does it

20:09

digital and the physical world?

20:11

Already, if you look at how, maybe

20:13

not your children, because

20:16

I know they're homeschooled, so they probably, but

20:20

if you look at how young people spend

20:22

their lives, how much of their lives do they spend

20:24

online?

20:25

And their identities

20:27

are now being formed online. And

20:30

the authenticity of that identity,

20:32

the ownership of that identity

20:35

is becoming critically important to them.

20:37

So it's a world that you and I

20:40

are not living in, but it is alive

20:42

and well, and it is going to burden

20:45

in a way that is going to surprise people

20:47

who are not paying attention to-

20:49

So how do you live there, Kathy? Like, because

20:51

I grew up with bicycles

20:54

and guns,

20:55

and I did. Like,

21:00

I had a gun when I was 11 years old,

21:02

man. And, you know, we

21:05

walked to school or got on a bus and we came

21:07

home when the lights went out. But how

21:09

do you, you're gotta be a similar age

21:12

to me. I'm older. No way, you

21:14

look, how good does she look, huh?

21:17

She must be on 10 XL. How

21:22

do you live in that world? How do you think like

21:24

that? Cause I can't think about me

21:27

being in a digital universe yet. Well,

21:31

if you're on Zoom and- Yeah,

21:33

you're right. You're in the digital universe.

21:36

If you think about the earliest manifestation,

21:39

when we're trying to help people understand what

21:42

NFTs are, you know, people

21:44

are talking about avatars, but when you, the first

21:47

real web three experience,

21:50

Zoom. Right?

21:55

So you're used to that.

21:56

Very. You need it, right? Yeah,

21:58

yeah. Okay, we'll get you there. Get me there.

22:01

Pull me into the future. No,

22:03

it is so exciting. Look,

22:06

you're 10X. 13 trillion

22:08

to 200 trillion. Doesn't that

22:10

pull you in right there?

22:11

It kind of does pull me. It definitely gets

22:14

me interested. And it is why

22:16

we started, we feel this

22:18

movement is so important. And

22:21

we feel, and I was listening to some of the

22:23

commentary here, we feel that everyone

22:26

needs to be a part of it. And that is why

22:28

we have broken all the rules

22:31

or they're not exactly rules,

22:33

but the conventions. And we have started

22:35

our own public-private,

22:38

think dominated by private

22:40

companies, venture

22:42

fund that non-accredited

22:45

investors for $500 can invest in. And

22:49

we're doing it,

22:50

talk about the digital

22:52

world, we're doing it with social

22:54

distribution through an app

22:57

called the Titan app. So for $500,

22:59

individuals who were blocked because

23:04

they didn't, they have the right income

23:06

threshold or asset threshold, they

23:08

were blocked from these 10Xers, 100Xers.

23:12

They have been blocked. You're

23:12

talking about the big 10 baggers, the big

23:15

opportunities, the IPOs. Getting these companies

23:17

very early on in their lives.

23:20

And I believe that our research, we're the

23:22

only company out there doing

23:24

research exclusively on disruptive

23:27

innovation suits us towards

23:29

this kind of portfolio. So it's

23:31

the ArcVenture fund using

23:34

the Titan app. And I

23:36

do believe we're going to be democratizing

23:38

and that's what I see you doing here. Democratizing

23:42

the world of private investing.

23:45

So talk to me about how locked down

23:47

Wall Street is right now for the wealthy,

23:49

because this is what I discovered when we started

23:51

raising money for non-accredited. Everybody

23:53

told me, do not go for the non-accredited. It's

23:55

too much trouble, it's too expensive. I'm like, yeah, but

23:57

it's the right thing to do. And then that's,

23:59

That's when I discovered how lockdown,

24:02

you know, some of these abbreviation

24:06

networks are protecting Wall Street. Can

24:08

you just talk about how wealthy

24:10

people need to be to actually ever get on the

24:12

inside of a deal and what you're doing to democratize

24:15

and make the little guy a chance to win on

24:17

a big score?

24:18

Let me tell you, even the wealthiest

24:21

people are having trouble getting

24:23

into deals because that

24:25

world of deal making

24:27

is so small. I mean, we are

24:30

able to get into deals that

24:32

foundations and endowments and

24:35

small institutions are not able to get into

24:37

because we're doing something different. And the venture

24:39

world wants to be associated.

24:42

They've been criticized for

24:44

not paying attention to non-accredited

24:47

investors. So they are actually

24:50

helping us and we are getting into deals. But

24:52

to give you a sense of

24:55

how important I believe this

24:58

investor base is, if I know

25:02

our client base

25:04

in the public world, they are non-accredited

25:07

for the most part. The ETFs,

25:10

so ARKK, ARKF, these

25:12

are ARKs, ETFs.

25:14

These are liquid funds I can get in and I can

25:16

get out tomorrow. You can get in out. You can get

25:18

in and a minute later I get

25:20

out. That's how liquid they are. When

25:23

I have, as I've studied our client base,

25:26

I have been struck

25:28

that they know so much more

25:30

about the technologies

25:33

we're investing in because they read our

25:35

research. We give our research away. They're grateful

25:37

for it. They want opportunities,

25:40

right? If

25:42

you ask me who the accredited investors

25:45

are when it comes to knowledge base,

25:47

which is how I think this should be measured, it's

25:50

our client base. It is not the institutions.

25:53

It is not the high net worth individuals. It

25:56

is individuals who are excited

25:58

about how these technologies

25:59

are going to transform our lives,

26:02

how they're going to level the playing field and

26:04

give everyone a shot

26:06

at an amazing future. Yeah. Yeah.

26:09

Yeah. And you're

26:11

saying the hedge funds and the pension

26:13

funds, the traditional

26:17

institutions, you're saying, are not looking

26:19

at those small companies early on

26:21

or? They think, in terms

26:23

of just our basic ETFs, they

26:26

think we're crazy. Because we don't

26:28

look anything like an index. In

26:31

fact, we pride ourselves in not

26:33

looking like an index.

26:34

Meaning what? You don't have a balance? You

26:36

don't have a balance. When in the 80s

26:38

and 90s, the NASDAQ was known for

26:40

being the place to go

26:42

to access innovation, gain exposure

26:45

to innovation. If you look

26:47

at the NASDAQ today, we don't

26:49

own any of the stocks in the NASDAQ

26:51

except for Tesla in

26:54

our flagship portfolio. So

26:57

that's a great opportunity.

26:58

So your stock you own today

27:00

would be what? Would we even know the names of these companies?

27:02

Well, if you know exact sciences,

27:05

you know Coligard. OK. OK,

27:08

well, it's not just about colorectal cancer.

27:10

It's about all kinds of cancer, finding

27:12

it in stage one. That's a big idea.

27:15

It's about Roku, connected TVs,

27:18

taking share from linear TVs.

27:21

They have 18% more households

27:23

than linear TVs do here in the United

27:25

States. But only 23% of the advertising. That's

27:28

a very big idea. We've

27:30

got Teladoc. And

27:33

we think that's going to be the health care information

27:37

backbone

27:37

of the United States, if not other

27:39

parts of the world. So these are very big

27:41

ideas. And very importantly,

27:44

I think when people think of artificial intelligence,

27:47

they have an internet mindset. What's

27:49

going to be the killer app here? That's not the right question.

27:52

You want to figure out how to

27:55

harness AI to increase

27:57

productivity, increase your efficiency.

27:59

That's the first killer app. And

28:04

the second killer

28:06

app is really all about data.

28:09

The companies with really

28:11

large pools of proprietary

28:14

data, as some of these companies I've just imagined,

28:17

I've just mentioned. Teladoc. Yes, Teladoc,

28:20

exact science.

28:20

Roku would have a big database. Huge databases.

28:23

Are you saying they're going to sell those? Are they going to

28:25

leverage those later? They're

28:26

going to leverage them. They're going

28:28

to leverage them. You're going to be able

28:31

to order in the

28:34

Roku app. You're the dinner

28:36

that's just been advertised on the television

28:38

show you're watching. So yes, it's the

28:40

convergence of all of these technologies.

28:43

Man, that's amazing. Okay.

28:46

Like, how do you, like, when somebody, does

28:48

your staff bring you an idea and say, Kathy, look

28:50

at this? Are you,

28:52

they're doing the work? I mean, how does that?

28:53

We are working together every

28:56

day. Morning meetings, brainstorms. Who

28:58

signs off the, who says, we're going to invest? What's

29:00

a big investment? Like, how much money

29:02

would you put in? Oh, gosh. Well,

29:05

we run 25, almost $25 billion. So 1%

29:08

of $25 billion is a starter.

29:12

Wow. Yeah. So.

29:16

See, that's why I got to get around grownups. Because

29:20

I'm thinking like, I've been

29:22

thinking like a punk over here. So

29:26

when you look at a guy like me that's investing in real

29:28

estate, it's got to have cash flow. It's got to have

29:30

a great location. I got to have leverage. It's

29:32

got to be full. What do you think about a guy like

29:35

me? I'm just a coward.

29:36

No, I love that you're

29:38

out there because I think all

29:40

investors need to diversify. Your

29:43

strategy is a much safer

29:45

and less volatile strategy than

29:48

ARK's strategy.

29:50

And there's a place for both of them. You

29:52

know, diversification is critical

29:54

and rebalancing as our

29:57

stock price appreciation in 2020.

29:59

was off the wall during

30:02

that kind of time period. You

30:04

take profits from something that's

30:07

gone way, you know, has

30:09

had-

30:09

How much did you move in 2020? It was

30:11

about 150%. Oh my God. Yes,

30:14

so it was, innovation solves problems.

30:16

We had a lot of problems, COVID, right? Innovation

30:19

solves

30:19

problems. Oh, so you were in Zoom, you were in all the

30:21

stocks that were stay home.

30:23

We actually took profits in Zoom

30:25

and Teladoc and all of those that were obvious

30:27

at home plays and put them into

30:30

stocks that the algorithmic traders

30:32

out there were selling because they

30:34

didn't have cash flow and we were going

30:36

into a depression supposedly.

30:39

So they sold all of our genomic stocks or

30:41

we call that multiomics. They

30:44

were down 80% within a month, you

30:46

know, just algorithmic trade. So we were

30:48

using that kind of opportunity. The

30:51

no brainer Zooms and Teladocs, which

30:53

are big parts of our portfolio now, have

30:55

been destroyed in the

30:57

ensuing, you know, two to three

30:59

years. And so

31:01

this is what active management is all about.

31:03

So when you have that kind of swing,

31:06

how do you handle, I'm

31:08

sure one day you're a darling and the next

31:10

day you're wrong. So how do you handle

31:12

those kind of swings? Next day I'm a

31:15

goat.

31:15

Yeah. Like not the

31:18

capitalized G-O-A-T, I'm

31:20

a goat. How

31:23

do you handle that? Is that just

31:25

part of the game? Keep your eye on the

31:27

prize. It doesn't phase me honestly,

31:29

because I've been through so many cycles. Keep

31:32

your eye on the prize, trade around

31:34

opportunities. You know, when we were selling

31:36

Zoom and Teladoc, they

31:39

continued to go up and we

31:41

were selling them. But that gave us

31:43

the psychological wherewithal when

31:45

they fell by 50, 60% to

31:49

move back into them because they

31:51

really are answers to

31:53

the way the world is going to

31:54

work. If you were one of the people here

31:57

today and you were out, you're

31:59

gonna go either by... business this year or

32:01

you're gonna start

32:03

a brand new one. Which way would you go? Would

32:06

you start something brand new or would you go buy something

32:08

that's already in the space?

32:11

If I had an original

32:13

idea that was going to

32:15

meet an unmet need

32:17

out there, I would start my own

32:19

business. That's why I started

32:20

from scratch.

32:22

But you have to have an

32:24

idea that, actually I have

32:27

to have an idea that people are almost dismissed.

32:29

Like when we started Arc and

32:31

started in ETFs, which used to be passive

32:34

interest instruments, you know, just managed

32:36

like indexes. And we said no,

32:38

we're going to manage day to day with these

32:41

portfolios. People laughed at us.

32:43

They didn't think it was going to be successful

32:45

at all. And it gave us a great

32:47

opportunity. It took

32:50

five years for others, much

32:53

better established companies, to say, oh okay,

32:55

maybe they're on to something. And

32:58

because we started and focused solely

33:01

on disruptive innovation, they thought that was

33:03

crazy. They still think that's crazy. Now

33:05

they're trying to imitate us a little bit here, a little

33:07

bit there. But they're not doing

33:09

it the way we are. No one is doing it the way

33:11

we are because no one has our research.

33:14

We have the best original research on

33:16

disruptive innovation, I believe,

33:18

on the planet.

33:19

When did you guys move to Florida? When

33:21

did you go to St. Peter's? November a year ago.

33:23

And from where? From New

33:26

York City. Okay, why? And why did you make that move?

33:29

For a few reasons, actually lots

33:31

of reasons. Of course, taxes

33:34

come up and that was an important reason.

33:36

But we were ready. I was looking

33:39

at Arc saying, okay, we

33:41

have scaled and I see a lot of asset

33:43

management companies kind of just stop

33:45

and

33:46

tread water. Up there? Yeah, at a certain

33:53

level. They kind of get fat, dumb,

33:55

and happy. And I said, you know what,

33:57

we've got to do something to...

33:59

to keep the spirit

34:02

alive. I mean, we have an

34:04

incredible culture. We

34:06

believe that St. Pete, Tampa

34:09

Bay region,

34:10

is the

34:12

next Austin, is the next Austin,

34:15

and we wanna help make it that. So

34:17

it's very exciting to be a part of that.

34:19

It's fantastic, by the way, it's not Tampa, it's

34:21

St. Pete. St. Pete. St.

34:23

Pete is phenomenal. Did you guys buy office

34:25

there or did you lease it?

34:27

We leased an office. We love leases.

34:29

What space did you take? I think we

34:31

have 15,000 square

34:33

feet, something like that. Okay, okay. But

34:35

now you're gonna ask me how much we paid. No, I'm not gonna

34:37

ask you what you paid. I'm gonna try to figure out

34:40

how to pump your landlord. I have to bring it over to someone. I

34:43

would love to lease you some space. So,

34:47

how many people moved from New York down to St.

34:49

Pete? So two thirds of us, but

34:52

we were already so. You live there permanently now? Yes.

34:55

Okay, well welcome to Florida. Yes. Okay,

34:58

last question. Has she been great

35:00

or what? Yeah, I've been great. Thank you. It

35:03

is very difficult. You're great,

35:06

you're great. Well, thank you. You're great.

35:08

It is very difficult to find women that

35:10

wanna speak on stages. It's very, very

35:12

difficult, so I really appreciate you being so, like,

35:14

we asked her, she's like, yeah, sure, I'd love to come

35:17

and didn't make a big, not

35:19

a bunch of problems. Easy

35:23

to work with, transparent. Like, I

35:25

like all that stuff, because sometimes we get a whole

35:27

list of stuff,

35:28

like, yeah, yeah, I'll come, but I gotta have a trampoline

35:31

in the back, and I gotta have certain color M&Ms,

35:34

and don't ask me these questions. What

35:36

does the term

35:37

10X mean to Cathie Wood? Well,

35:41

it is kind of the way I think, right?

35:45

If you're involved in disruptive innovation,

35:47

we are taking the risks and assessing

35:49

them with rigorous research. If

35:52

we believe, I think I've

35:54

given you a 10X, that's why

35:56

I started Arc. 13 trillion

35:59

to...

35:59

hundred trillion is more than 10x. And we

36:02

really believe we

36:04

really believe this is going to happen because

36:07

the technology is ready and

36:09

the costs are low enough. All

36:11

of this was planted during the 80s

36:13

and 90s. It's going to happen now.

36:15

So we're all about 10 X.

36:17

OK. I'm going to do one more question. You guys mind.

36:20

OK. And I asked you this on Twitter spaces. If

36:23

you had one million dollars

36:26

and you had 24 hours

36:29

you had to invest in. I give you a million dollars I say

36:31

but the money has to be invested and you can only

36:33

invest in one stock. Three stocks

36:37

can only invest in three stocks. I

36:39

got to diversify. I'm scared. I'm

36:41

a bitch. I'm scared. I

36:44

can't do it. So you can only

36:46

invest in three stocks. What would those three

36:48

names be. And I have to keep it 10 years.

36:51

I cannot sell it before 10 year.

36:52

Right. So and

36:55

you'll find the models for all of you. They have

36:57

to pay for this. Yeah. This advice

37:00

to me. Go ahead. No we are now publishing

37:02

our models and so I'll give you three that the

37:04

models are out there on GitHub on

37:06

our Web site. You can play with them. The

37:08

Web sites what. Our dash

37:10

invest dot com. OK. So

37:12

Tesla of course we believe autonomous

37:15

taxi platforms are

37:18

going to scale and create the biggest

37:21

revenue generating. You

37:22

think he's going to get the autonomous thing for sure.

37:24

Absolutely. Yes. Yes

37:27

we do. And you see cruise

37:29

automation as the proof of concept already.

37:31

That's very interesting to us. So

37:34

we have a fifteen hundred dollar price

37:36

target on Tesla. It's about a little over 200

37:39

now. So that's that's

37:41

one. Were you

37:42

buying it at 112 when it was there two weeks ago.

37:45

We were buying it every day as

37:47

it was sinking and it was sinking

37:49

because he was selling because he needed some funds

37:52

for his Twitter acquisition. Is that right. And

37:54

other other reasons. You know

37:56

China had zero covid and was

37:58

causing problems for production.

37:59

There are a lot of short-term reasons which

38:02

don't matter to us really that's why

38:04

we can buy through moments like that Tesla

38:08

Tesla Roku, I think TV

38:11

yes, we have that if I had 10 TV

38:13

shows. Do you think I should give them to

38:15

Roku? I think

38:17

I think you'll find out a lot more about

38:20

your Your viewers then

38:23

if you have those 10 TV stations now,

38:25

right then you would through linear TV

38:27

So absolutely no question about it. Okay.

38:30

Yeah and

38:32

The latest one we've published is exact

38:35

sciences so I have to give you one

38:37

from each of our strategies exact

38:39

sciences Cola guard,

38:41

but you know here we have a chance

38:44

of discovering cancer

38:46

in stage one and With

38:48

artificial intelligence companies like exact

38:50

sciences and free known free knowns in

38:52

our ArcVenture fund We

38:56

believe that with AI This

38:59

is the promise out there. This is why 10x is so

39:01

real

39:02

We believe that with

39:05

AI

39:07

That researchers and ultimately

39:10

physicians are going to help us discover

39:12

When a body's cancer is setting

39:15

up to mutate and cause

39:17

cancer. That's before we get

39:19

cancer So and

39:22

we're dealing with the people who are

39:24

making this happen We are and

39:26

you can we give all of our research away

39:29

on arc-invest. We're on Twitter

39:32

very prolific on Twitter all of our analysts

39:35

have their own handles and

39:37

So if you're if you

39:39

want to know more about artificial intelligence,

39:42

you know follow will it will Summerland

39:45

at on art

39:46

Yeah, we'll put it up for everybody and

39:48

and if you want to follow blockchain

39:50

technology, you're saying seen Almondra

39:54

So and then if you like

39:56

what they're saying follow who they follow

39:58

and it's going to be the best way for young

40:01

people to educate themselves about

40:03

this brave

40:03

new world. Okay, last question

40:05

of the three round last question. Now

40:09

this is for me to understand because when I listen to

40:11

her, Brandon, and when I listen to Kathy, I'm like, shit

40:13

man, we

40:14

shouldn't even have businesses that make money. We

40:17

have probably 16 companies, every

40:19

one of them is profitable, every single one of them.

40:21

And there's a place for that. So

40:23

if I wanted to one day take 30 or 40 companies,

40:26

put them together and then go public, could you help me

40:29

like learn how to do that? Or do I even wanna

40:31

go public?

40:32

Put them, you'd wanna go, you want to

40:34

go public with companies if you want to

40:36

scale exponentially. You're probably

40:39

going to need the capital markets.

40:41

And the other thing that going public does

40:44

is it increases the probability

40:46

you'll attract the right talent and

40:49

the right customers. It's a big

40:52

advertisement for, you know, when you

40:54

go public. It's a-

40:55

Big promotion. Yes. You

40:58

do. So would you help

41:00

me? I'm trying to get a commitment from you that you would kind

41:02

of keep my mentor and guide me. If you're

41:04

saying you put them all into one

41:07

company, that's a conglomerate. We don't

41:09

like conglomerates. We like pure plays. Okay.

41:12

That's just my preference though. I'm sure you could find some-

41:14

Well, maybe we have some pure plays. Maybe we have 20 or 30 pure

41:16

plays. You

41:18

know, look, I'm here for the guidance, okay?

41:20

If your companies

41:22

are involved in disruptive innovation that's

41:24

going to transform the way the world works,

41:27

yeah, come to us and help- Ladies

41:28

and gentlemen, Miss Cathy Wood. The

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