Morning Wood: ARKK Founder Admits She Got Inflation Wrong, Says She’ll Continue Her Strategy Anyway

Cathie Wood finally offered up somewhat of a mea culpa – at least for her previous calls on inflation, though not quite so much for the underperformance of her flagship fund and her previous call that the market had bottomed back in January – on Tuesday of this week. 

After being bludgeoned in the face with data that was perpetually proving her prognostications incorrect, Wood told CNBC on Tuesday: “We were wrong on one thing, and that was inflation being as sustained as it has been.”

But what would that mea culpa be without immediately falling back on her greatest hits, including once again predicting deflation?

According to Bloomberg, Wood then added: “Supply chain — I can’t believe it’s taken more than two years, and Russia’s invasion of Ukraine, of course we couldn’t have seen that. So inflation has been a bigger problem. But I think that it has set us up for deflation.”

Wood also did a decent job pointing out the state of both the high end and the low end consumer in the U.S., stating: “The consumer is railing against these price increases,” Wood said. “Many people think, ‘oh, the heavy spenders will keep this thing going.’ Consumer sentiment in the highest-income groups is lower than in the lowest-income groups, and the latter group is being tormented by food and energy prices, which are really a regressive tax increase.”

Wood also continued to defend her strategy of picking “innovation” stocks, despite the fact that her ARKK fund has been decimated so far in 2022, falling about 53%. She said: “The most important thing we need to do is stick to our knitting. The worst thing that could happen is style drift.”

“When people invest in Ark, they know they’re getting truly disruptive transformative innovation. That’s what we offer, and we don’t pretend to offer anything else,” she continued. Because why let the facts change your investing outlook, right?

As Bloomberg dryly noted on Tuesday, “Wood joins Treasury Secretary Janet Yellen in admitting incorrect inflation projections.”

If the two of them didn’t make up 12 hours of a 13 hour day of financial news programming, it almost wouldn’t be an issue, right?