Exceptional discipline: Not advised to start up: Cathie Woods mentor on the investment strategy and ambitions of the ARK boss | message
Long-term investment strategy recognized
Warning of risky ARK Invest formation
Wood mentor Laffer: ARK founder with exceptional discipline
Cathie Wood is known as the “best female investor in the world”. But before the entrepreneur set up her own business with ARK Invest in 2014, she was still working as an assistant economist at The Capital Group while studying economics at the University of Southern California – a job that her mentor and then Professor Arthur Laffer gave her. Opposite the Quartz web portal, he chatted up close and gave one or two details about Wood’s ambitions to assert himself in the male-dominated financial world. In the early 1980s, the professor held business courses at the university, which were actually aimed at master’s students. Bachelor students, including Wood at the time, were usually denied access to his lectures, as they were often not ready for the challenging subject, as he told Quartz. But this was not the case with Wood. “You don’t want a freshman to come and get killed,” says the economist. “And I was very sure about her that it wasn’t going to happen, and it didn’t. She was able to withstand the pressure and discipline of a Masters course while she was still a freshman, which is pretty extraordinary. ”
Laffer advised against creating a risky ARC
Laffer was also convinced of the ambitions of the future entrepreneur. “The amazing thing about Cathie is that her horizons were infinite even then,” the mentor continues. “It wasn’t about the next week, the next month or the next year. It was about the long term.” In 2014, Wood came up with the idea of launching an actively managed ETF. However, the concept was too daring for her then employer AllianceBernstein, which is why she went into business for herself – and laid the foundation for her own investment company ARK Invest. This step was very risky for the future fund manager, as the portal reports. The entrepreneur invested all of her equity in the start-up in order to be able to pay for her employees. “I was very concerned that it would go under,” said Laffer, referring to this uncertain time. Therefore, he advised his former student to exercise restraint and not make risky decisions. “She rejected my advice pretty clearly,” recalled the university professor. After all, that was one of the best business decisions Wood had ever made in her career.
A dream come true with ARK Invest – success proves Wood right
So ARK was able to convince with strong returns and meanwhile win numerous customers. The ARK Innovation ETF was first traded at US $ 20.42 when it hit the market in October 2014 and has since increased by more than 500 percent to most recently US $ 123.26 (closing price on April 9, 2021). Wood gradually added a few more investment products to its portfolio, most recently with the Space Exploration & Innovation ETF, a fund that tracks listed companies in the space industry. Still, the economist believes Wood would have seen it athletically if ARK had failed in its early days. The entrepreneur’s ETF plans were her dream, to which she was happy to sacrifice her savings, said Laffer. With ARK Invest, Wood can do what she loves. “She likes risk in terms of investing in large payouts over long periods of time.  And she doesn’t take the money off the table quickly. “At the same time, however, she can also make difficult decisions, which she has to do regularly in her job.
Wood said last year to the US major bank Goldman Sachs that Laffer was one of their most important mentors. So the two should keep in touch. As of the economic 2019 from the previous US president Donald Trump Received the Presidential Medal of Freedom, a US civilian award, the ARC founder was also in attendance.
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