OXY - ARKK: Why Cathie Wood Is Wrong To Bet Against Commodity Prices

• Recently, I wrote a bearish article on the ARK Innovation ETF, suggesting ARKK was significantly overvalued and the underlying top-ten component companies were selling at unsustainable price-to-sales ratios.
• Subsequently, filing disclosures showed Michael Burry with a short position in ARKK expressed via put options.
• In less than a day, Cathie Wood expressed why she felt Michael Burry and those bearish on ARKK were incorrect in their views, highlighting price action in the bond market.
• Also in her defense of ARKK, Cathie Wood elaborated on why inflation was transitory, taking aim at elevated commodity prices with examples showing that they were falling.
• Indeed, lumber prices have come down abruptly; however, other commodities like steel, are making new all-time highs, and this is more representative of the supply/demand imbalance created through capital starvation.

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