Cathie Wood and her ARK Investment Management firm are using the recent stock market selloff to go on a buying binge, snapping up shares of nearly 30 companies.
Cathie Wood is channeling the investment advice of J. Paul Getty, once the world's richest man, purchasing shares in 27 companies via eight Ark Investment Managements exchange-traded funds (ETFs). The purchase came amid a heavy market selloff prompted by fears that the US Federal Reserve will undertake a historically large interest rate hike next week in its battle to combat inflation.
According to a «Bloomberg» (behind paywall) story, the largest purchase was Roku Inc. and is the third largest stock held in ARK Innovation ETF.
J. Paul Getty's Advice
Once the world's richest man, and the subject of a 2017 film «All the Money in the World» starring Christopher Plummer, J. Paul Getty offered investment advice that Wood is heeding now.
«Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing,» was Getty's advice.
Contrarian Inflation View
Major central banks around the world are hiking interest rates after years of easy money policy in the wake of the financial crisis. Inflation has now become a major concern and has been more stubborn than policymakers initially expected. A survey conducted by «Reuters» shows that economists expect the US Federal Reserve to crank interest rates up by another 75 basis points next week, with some expecting as much as a 100 basis point hike.
Wood, however, sees a different scenario developing, tweeting on Monday that she sees deflation «in the pipeline», according to the «Bloomberg» story.
With her recent purchases, she's betting very big on that outcome.
