When reviewing the investment performance of any vehicle the picture you paint will depend upon the starting and finishing dates you select. This is an old trick of everyone from fund managers to financial planners to make something look really good. It is also sometimes used by journalists to make a rather tenuous point.
This piece by Bloomberg popped up on my Twitter feed recently and it highlights this sort of problem. The article shows that a given technology ETF (Code:MOON) is outperforming one of the darlings of this segment of the market (Code:ARKK). To emphasize this point the used the following chart –
Whenever I see a performance comparison chart I always go directly to the source. So I fired up Koyfin and generated the following using all the data they had.
As you can see MOON is a relative newcomer whereas ARKK has been around for a while so a comparison based upon little more than six months worth of data is somewhat meaningless but it makes for a reasonable story for those wishing to fulfill whatever agenda they may have. So far – so dull nothing unusual in ordinary financial journalism but what really caught my eye was that this article’s appearance on my feed followed directly on from a so-called market wizard rejoicing in the fact that ARKK had suffered a 19% drawdown and he seemed completely oblivious to the fact that since inception it had gained 666% and was up 300% in the past year. Following hot on the heels of this piece was the final part of this story – Why Do Some People Hate Cathie Wood?
Micheal Batnick has done a good job outlining the potential reasons for people’s antipathy towards ARKK and its founder Cathie Wood which is perhaps best encapsulated in this paragraph.
So why do some people hate Cathie Wood? The obvious answer is because she’s an outsider. She doesn’t look like “one of us.” I think there’s more than a little truth here, but I think this is just one part of a bigger schadenstory. Her gender is absolutely an essential part of this, but there are other factors at play. The people rooting for her downfall are the same people who want to see Elon Musk crash and burn. Ditto for Chamath.
As a somewhat tangential point – in markets, there will always be people doing better than you and people doing worse. That’s just the way it is. If you cannot tolerate the success of other people then you probably have a little bit of work to do on yourself.