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ARK's Wood turns focus to deflation, 'stay connected' stocks

Stock MarketsJan 11, 2022 02:20PM ET
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© Reuters. FILE PHOTO: Cathie Wood, founder and CEO of ARK Investment Management LLC, speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 13, 2021. REUTERS/Brendan McDermid/File Photo

By David Randall

NEW YORK (Reuters) - Star stock picker Cathie Wood of ARK Invest doubled down on her bet that deflation, rather than inflation, will be the largest factor in the U.S. economy in the year ahead in a webinar on Tuesday.

Wood, whose ARK Innovation ETF was the top-performing U.S. equity fund tracked by Morningstar in 2020 before plummeting to among the worst performers of 2021, pushed back against the idea that companies in her portfolio such as Zoom Video Communications (NASDAQ:ZM) Inc and Teladoc (NYSE:TDOC) Health Inc were simply beneficiaries of the economic lockdowns at the start of the coronavirus pandemic.

"They are not stay-at-home stocks, they are stay connected stocks," she said.

Zoom, for instance, should "have stunning growth rates ahead" while Teladoc will become the "backbone" of the U.S. healthcare system, she said.

Inflation, meanwhile, will fall this year as supply chain bottlenecks ease and companies no longer feel the need to put in double or triple orders for goods, Wood predicted. At the same time, technology will continue to push down prices of goods and services, she said.

"Companies are learning how powerful technology can be on holding the line on costs," Wood said.

The ARK Innovation ETF is down 7.6% for the year to date as rising interest rates have weighed down on the sort of high-growth, high-valuation companIEs in its portfolio.

The fund was up 3.2% in afternoon trading Monday.

ARK's Wood turns focus to deflation, 'stay connected' stocks
 

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