SPY - Cathie Wood's Comparison Of Current Stock Market And 1930s Great Depression Draws Criticism From Jim Chanos: 'Complete Financial Insanity' | Benzinga
Ark Invest founder and fund manager Cathie Wood drew flak after she made a bleak assessment of current market conditions in a post on X, formerly Twitter.
Risk Aversion In Play: “Search for cash and safety in the equity markets today is as intense as that during the Great Depression in the early 1930s,” Wood said in the post. Her comments came as she quote-posted a video clip of her monthly “In the Know” video series.
In 1932, there was “massive fear,” crowding into the same stocks, just because it looked so simple, she said in the clip. From 1939 to 1946, the market went up and the larger-cap stocks underperformed relative to the rest of the stocks, she said.
“When fear dissipated, the market broadened out and rewarded risk-taking once again,” Wood said.
While noting that the market is currently at all-time highs, the stock picker said one should look into how much indexation and momentum in a few stocks are driving the rally.
In a healthy market, there will be a broadening of the rally, which could come about when interest rates fall, she said. When the Federal Reserve’s dot plot began pointing to much lower interest rates in the fourth quarter of 2023, the bull market in equities broadened dramatically, she added.
“This far this year, the opposite has happened. In our view, ...