Ark Invest Founder and CEO Cathie Wood on Monday called out the shift towards passive investing as mindless and backward looking, pushing investors to “mimicking indexes” over inflation related fears.
What Happened: A Tesla Inc (NASDAQ:TSLA) bull, Wood argued that stocks at the top of the indexes are there because of what has happened historically.
“I believe this is the most massive misallocation of capital in the history of mankind,” Wood said during a panel discussion held at The Forbes 30/50 Summit in Abu Dhabi.
Wood was talking about finding a balance between long term vision and short term results.
"Innovation solves problems... We now have a lot more problems," @CathieDWood says. #Forbes3050 #3050AbuDhabi pic.twitter.com/AvDVJuUcPU
— Forbes (@Forbes) March 8, 2022
The popular stock picker said investors have “the most magnificent opportunities” ahead of them due to the “massive amount of innovation” that is taking place, but fear and concerns over inflation have pushed inventors “back to the benchmarks.”
See Also: Cathie Wood Maintains Inflation To Prove Temporary, Says 'Cracks' In Commodity Markets Evident
Higher EV Adoption: Wood pointed out that the conflict between Russia and Ukraine would drive oil prices higher, which in turn would accelerate the push towards electric vehicles and autonomous vehicles.
“Long term, though longer term than I expected, oil prices will collapse under the weight of lower demand. Innovation solves problems!” Wood tweeted on Monday to further explain her take.
I got the supply shock wrong. That said, the accelerated shift toward electric transportation will destroy oil consumption at the margin. Long term, though longer term than I expected, oil prices will collapse under the weight of lower demand. Innovation solves problems!
— Cathie Wood (@CathieDWood) March 7, 2022
The high-profile investor had, until last year, maintained she is not concerned about inflation and rising interests as much as the cracks in the commodity markets, which could pose a bigger risk.
Wood expects the Tesla stock to hit the $3,000 mark by the end of 2025.
Price Action: Tesla stock closed 4% lower at $804.6 a share on Monday, and was trading down 0.76% during the pre-market on Tuesday.
