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right you're enjoying potentially life-changing success um most certainly but I have been around the block a few times and whenever things have gone this well for me uh usually there's a correction for the last two hours I'd sat with a friend at the Baja mar Cigar Bar in the Bahamas we'd attended as media the FTX salt conference a posh cryptocurrency event that would reinforce the Pomp and false truths about Sam bankman freed months before his implosion across the patio there was the headline speaker chatting with high profile money managers everyone at nearby tables turned to her pointing in Joy but too nervous to approach but me I had to ask a question as she stood and departed I walked toward the same patio door before I caught up another man swooped in and cut me off he started gushing about how much he admired her firm this guy he was trying to get a job I was not you see something bothered me about her strategy so I stood and bounced a few steps away waiting 5 minutes 10 minutes 15 minutes it must have lasted 25 minutes but when I finally had the chance to shake institutional Champion Kathy Wood's hand I began with this setup what purchased many tech stocks while the markets pulled back in 2021 and 2022 she called these beaten down names value stocks now I just written a piece in luck box magazine exploring her portfolios and asking one critical question if corporate Executives CEOs CFOs chairpersons at those same companies weren't buying their own stocks at the same prices she paid why was she buying them in the first place in 2020 Woods firm Arc invest had five of the top seven performing ETFs in the markets she's had line conferences she's praised in Bloomberg and gushed over CNBC but since February 2021 The Arc Innovation fund has dramatically underperformed shares have plunged from just north of 159 dollars to now about 39 bucks it bottomed at around 29 last December I would not be surprised to see the FED cut rates this year what is said that we should all wait five years and recently suggested the FED would soon cut rates helping her positions that's a slight admission that monetary policy is a boon for the strategy which relies on Rising Global liquidity chasing risk assets we can't say that 2020's market Rally or arc's performances was based on fundamentals after the FED dropped trillions from the sky and Congress paid people to stay home and day trade on many of the same names inside various Arc invest ETF portfolios Woods fund has a thematic approach that doesn't seem to be very quantifiable and questionable equalitative the central argument is that the company she owns will be disruptive and the best in their Industries she focuses on AI 3D printing and genomics all bleeding edge Tech but the strategy does rely on a preda natural ability to pick the right company from a sea of disruptors IPOs and more now I credit wood because she does all of this out in the open she's using an exchange traded fund an ETF which trades on the equity markets and displays all of her buys and sells daily this is an active trading strategy and it's not like a private fund that doesn't have to mark the market each day or a hedge fund that doesn't report its purchases or moves every 90 days it's all open inviting praise and criticism based on market conditions but back to my original question what is it using Equity momentum or liquidity readings she doesn't hedge much if at all that is what I'm willing to dismiss she might not believe in technical analysis and might be more focused on the FED than our focus on global liquidity which is all Central Bank activity private credit and cross-border capital flow what I can't dismiss or comprehend is very rational to me there's a complete avoidance of following the most important and strongest Financial anomaly Insider buying activity as I I've asked if the CEO or CFO isn't buying the stock at Woods buying levels after a pullback why is she buying my original question delivered this analysis in luck box as I noted Arc shares peaked at 159.70 in February 2021 Executives at the top 10 companies held by the arc Innovation fund sold nearly 28 billion dollars in shares from February 2021 to February 2022 while the ETF cratered according to SEC forms outside of the largest holding which is Tesla the remaining nine represented about 11 billion in executive selling now here's the punch line over the next 12 months how much Insider buying happened at the top 10 companies while their stocks fell from February 2021 to February 2022.
your options are one zero two zilch three nothing or for all of the above any of those answers will do I hadn't thought much about this research until this morning I came across a headline on Yahoo finance via tip ranks a platform that tracks Wall Street analyst forecasts it read too cheap to ignore Kathy Woods steps up these two stocks under five dollars the writers didn't interview wood but they did offer a recent quote of her pushing the narrative that her stocks will do quite well if the FED starts cutting rates but that timetables keeps getting pushed out months and months but I do think that what's happening this year is that the market is starting to look over the fed's moves whether there's one more or not into falling interest rates I think we're on the other side of that massive interest rate increase which did destroy a lot of performance that's the most important thing and we are ready for prime time well let's look at those names in Yahoo finance the first stock in the story is Velo 3D vld is the ticker and additive Manufacturing Company in the metal 3D printing industry the second stock is ginkgo bioworks DNA is the ticker this company quote specializes in synthetic biology and genetic engineering but keep in mind that the headline says these stocks are cheap just because they're under five bucks does not make them cheap fundamental analysis can tell us if a stock is or isn't cheap and if a company's unprofitable or has a high price to sales ratio over 10 or its Enterprise Value to ebit is over 20 I assure you it is not cheap Dilo 3D vld is unprofitable it has a 14 short float it lost more than a hundred million dollars last year and it's still trading well above its Book value and cash per share value there's nothing attractive about it unless you're a Speculator in quote producing custom microorganisms whatever that means meanwhile Ginkgo bioworks is also unprofitable they lost 1.25 billion last year and it trades at 10 times its sales for Revenue meaning it would have to pay investors 10 years of Revenue every dollar in the door not profits to justify its valuation once again five dollars doesn't make something cheap in our world but let's look at something more substantial are the Insiders buying DNA or vld well the answer is overwhelmingly no they've been selling all year this is a breakdown of Insider buying and selling activity at vld over the last five years the blue line is buying and the red line is selling there are no blue lines and recent selling over the summer and Ginkgo bio works well get ready look at all the sales over the last year there's only been one purchase in the selling the buying ratio is a stunning 1621 dollar for dollar now I will acknowledge that many executives are paid in stock and take money out of the market but if the stock gets cheap in their eyes I assure you they will buy it or they could at least hold on to their shares and look for appreciation to the upside so it begs the question if they're not buying why would you again in negative momentum with no Insider buying always ask if the executives aren't buying a stock why would I and if your answer is that you read a Yahoo finance article or saw it on CNBC run don't walk from that name foreign
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