We’ve heard it all about speculative growth stocks over the past few years.
Cathie Wood and the entire ARK Invest strategy has been lambasted by the media.
You’ve seen the cover stories. They tried to destroy her.
But Cathie’s ARK didn’t wreck. It survived the storm.
And I think it’s bigger than that. I think the most speculative, highest risk, longest duration equities are about to have their time in the sun again.
Everything I’m seeing suggests we are entering that part of the cycle where the worst stocks become the best stocks.
The animal spirits are living it up out here these days. Here’s how I know.
This is a fresh trend reversal for the flagship ARK fund. After 3 years we can finally say the path of least resistance is higher for these stocks.
We’ve always used the ARK funds as our main speculative growth information index. We never wavered on this, even when the fund was getting killed at the depths of the 2022 bear market.
Because it’s not about the performance. It’s about what it tells us. It’s not perfect, but Cathie Wood and ARK are the best in the business at picking these stocks. And this is where all the money flows to express this risk-on theme, particularly in the later innings of the cycle.
When these indexes are going up it tells us investors are positioning offensively and embracing an increasing amount of risk. It’s bullish.
Just like these new highs in ARKF:
Or how about ARKW. This one has been the preferred ARK index this cycle. It has led the flagship fund consistently.
But the strongest index in the ark suite has really been space and exploration. That’s true over just about all timeframes too. These stocks are red hot.
Here’s ARKX, the first to make fresh record highs.
And frankly, I think the rest get there before the bull market ends. That means some serious upside from here.
And the best opportunities are in the individual components. We have so many great options. A growing list of ARK-y stocks are completing trend reversals.
That’s my favorite part about this theme. It’s fresh. These are brand-new uptrends. These stocks are in the early innings. We can’t say the same about their large-cap growth counterparts.
So speculative growth is where I think the alpha will be in 2025.
Large and mega-cap, mature growth stocks had their moment. They’ve been the leaders for long enough. There’s a new game in town.
And for all the Cathie haters, I think it’s important to get used to this. You should have seen this coming. Shame on you. It’s not the first time she made a comeback, and it won’t be the last.
The ARK Invest strategy is always going to go big or go home. And it’s by design. It’s not a secret.
These stocks stand to be the biggest victims during bear cycles and the biggest beneficiaries during bulls. It’s just what it is. Don’t take it personally.
As for me, I’m glad to see ARK stocks back on trend. They are fun to trade. They are optionable. They come with big growth stories. And they have some serious beta.
What more could you want? These are ideal bull market vehicles. Learn to love them. They are going to make us a lot of money again this time around.
We’ve been leaning into the spec-tech theme over and over again since last fall. It keeps working, so we keep going back to the well.
Here are some ARK-y names we hit big on already. I’ve unlocked all the original trade idea posts below for educational purposes.
