Ark Of Schadenfreude

German can be a difficult language to learn and can confound non-speakers with its long, conjoined words. That said, there are certain German words that convey a complex situation more precisely than a set of English counterparts.“Schadenfreude” is one of them.

The definition of schadenfreude is “pleasure derived from another person’s misfortune”. See what I mean? It took six words to explain that one German term. But since I know that you don’t read these pieces for linguistics lessons, it is time that I tie the word of the day to a financial topic. I believe that a large segment of the market is trying to experience schadenfreude for Ark Investment Management.

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Image Source: Pixabay

Anyone following markets, whether in financial media or strictly on the internet, has likely heard of Ark Investments and its CEO Cathie Wood. Let me state for the record that I have a neutral opinion about the company and its products. I neither own any Ark funds nor have I met anyone who works for the company. Yet like so many others, I find their influence to be inescapable. New technology-focused and momentum-driven, the funds (particularly the flagship Ark Innovation ETF (ARKK)) have captured investors’ imaginations and have come to encapsulate the current investment zeitgeist (another great German word, by the way). 

Along the way, the funds’ stellar performance has attracted billions of dollars. That has to make competitors jealous. Furthermore, many of the funds’ top holdings are stocks like Tesla (TSLA) that have attracted an evangelical class of investors, and their fervor has spread into their Ark holdings. Most market participants don’t enjoy being preached to. With the recent market pullback, we are seeing some inevitable outflows from Ark funds along with various others. Yet the Ark funds’ outflows seem to garner extra media coverage. The media focus that greeted them on the way up, works both ways.

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