Cathie Wood Says We're Going Through 'Soul-Searching'

The transcript discusses the concentration risk in ETFs and the strategy of diversifying portfolios during bull markets. It explains the approach of concentrating portfolios during downturns, contrasting it with traditional asset managers. The speaker highlights unusual market conditions where their strategies are down despite market appreciation. They emphasize a long-term investment strategy with a five-year horizon, projecting a 40% compound annual return. The discussion includes assumptions of valuation compression and the focus on innovation platforms involving multiple technologies.

What is a key strategy used during bull markets to manage concentration risk?

• Avoiding any form of diversification

• Focusing only on index stocks

• Diversifying portfolios with cash-like instruments

• Investing solely in high conviction names

Why do the speakers choose to concentrate their portfolios during downturns?

• To follow the trend of selling stocks

• To avoid any market risks

• Because it aligns with traditional asset managers

• To capitalize on the opposite actions of counterparts

What unusual market condition is highlighted in the second section?

• Both market and strategies are up

• The market is up, but strategies are down

• Both market and strategies are down

• The market is down, and strategies are up

What is the expected compound annual rate of return over the next five years according to the strategy?

• 15%

• 25%

• 40%

• 50%

What assumption is made about valuations to achieve the expected returns?

• Valuations will remain constant

• Valuations will increase significantly

• Valuations will compress significantly

• Valuations will decrease slightly