Page 24 - Investment Advisor - October 2021

WOMEN IN WEALTH

By Jeff Berman and Bernice Napach

Top Market Predictions From Ark’s

Cathie Wood

Also, Schwab’s Liz Ann Sonders provides insights on inflation,

the Fed and taxes.

athie Wood, CEO and chief
investment officer at Ark
C Investment Management, con-
tinues to expect Chinese stocks to per-
form weakly overall, but she is open to
investing in some Chinese companies in
the innovation space.
That was one of the key predictions
Wood made in Ark’s August update
webinar.

1. Chinese stocks will likely continue
to struggle, but some firms in the
innovation sector may be worth
investing in.
After the Chinese government’s crackdown
on Chinese stocks listed in the United
States, Wood continues to expect several of
these stocks to continue to struggle.
“The valuation structure of those
companies is down and probably not vices sector,” Wood said. However, 4. There are “deflationary signals”
going to come back very quickly [and] “now, with crypto elsewhere, we have a in the market.
may even go down more,” she said. chance to leapfrog it.” “We’re seeing some deflationary signals
But later, she added: “I’m sure we’re right now that are cyclical in nature,”
going to find some very interesting compa- 3. The “struggle between growth she said, citing oil prices that at the time
nies in the innovation space, and so we’re and value” goes on. of her discussion in mid-August (pre-
going to keep an open mind there.” Those The “struggle between growth and Hurricane Ida) were “cracking here
stocks, however, “will be at a discount to value” continues, she said. “Our view from $77 on July 6 to $69 is something,
stocks in the rest of the world, and I think is that true growth — true meaning if it were to continue, that will convince
that cutting itself off in many ways from growth stimulated by innovation — is a lot of people” about that, she said.
the rest of the world is going to undermine going to be the winner. … But this tug The auto industry, meanwhile, con-
its goals longer term,” she predicted. of war will continue to play out until it tinues to blame declining car sales on
China has “embraced innovation,” but is clear that inflation is not an issue and chip shortages, and “I’m sure that’s
only “up to a point,” she said. “We’re interest rates are not going to start hit- true to some extent,” but there are
watching for signals” that China has ting new highs.” clues that more is going on, she said.
“done as much social engineering as The growth-value dynamic, she said For one thing, General Motors and
they feel they need to do.” “is really dependent on … inflation gaug- other automakers recently decreased
es and, I think, they will resolve to their earnings forecasts despite know- Photo courtesy of Ark Invest
2. Cryptocurrency continues to the low side, which will be a boon for ing about the chip shortages for a
provide investment opportunities. growth stocks and will probably hurt the long time, she said. “That tells us that
“China leapfrogged our financial ser- value side of the market.” there is an underlying weakness” in

22 INVESTMENT ADVISOR OCTOBER 2021 | ThinkAdvisor.com