UP - ARKK Implosion Is On The Horizon

• The ARK Innovation ETF has exploded, in price, and in assets under management over the past five years, however, it has stumbled in 2021.
• Fund inflows peaked earlier in 2021, and these fund flows have reversed as ARKK's performance has lagged.
• The top-ten holdings list, headlined by Tesla, has also seen price weakness after a very long period of outperformance.
• More concerning is the fact that these top-ten holdings trade at elevated price-to-sales ratios that makes it very difficult for shareholders to achieve positive returns from the current starting valuations.
• Like anything launched into the air, once acceleration peaks, velocity will peak too, and then the valuation anchored gravitational pull of the markets will spell a long fall down.

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