Female investors have crushed it this year, more on the one who beat the whole industry, and the ITM Holiday Reading List
Happy Holidays and best wishes for the New Year 💜
I recognize this newsletter is coming in the middle of all Holiday celebrations. I hope you are having a peaceful time with loved ones, whether you are spending time with each other online or in person. While taking some time off and relaxing you’re perhaps looking for something to read. In this week’s newsletter, I’ve included a Holiday Reading list, which includes some timeless books on investing but also my favorite recent business books.
2020 has been an unprecedented year in so many ways. And as this is the last newsletter for this year, I want to wish you a very Happy and prosperous New Year 2021. See you next year!
Women investors are crushing it 📈
Female run funds have crushed competition in 2020. Forbes found that at least a half a dozen firms led by women-led funds have blown away their peers. One of these women is Cathie Wood, founder of Ark Investments, who has had the best year of anyone. Her flagship fund ARKK had gained 154% year to date when the article was written. Wood is the Woman of the Week and in the section below you will learn more about her and why the ARKK fund is expected to widen the gap to competitors still this year.
Previously this year a report by Goldman Sachs found that female-managed funds, in general, have outperformed in 2020. This is much thanks to these funds having higher relative exposure to high-flying tech stocks Amazon, Apple, and Tesla.
Dating goes public 🔔
Last Friday Bumble, the dating-focused startup founded by Whitney Wolfe, filed IPO documents, albeit privately. Before founding Bumble, Wolfe was VP of Marketing at Tinder. It is said that she was the mastermind behind the name as well as the flame logo. She left Tinder due to tensions with other executives at the company. After leaving the company she filed a sexual harassment lawsuit. Her experiences lead to her starting Bumble, the female-focused dating app in 2014. Earlier this year, Bumble reached 100 million users earlier this year. A report by Bloomberg states that Bumble could target a valuation of between $6 and $8 billion at IPO.
Global venture funding to female founders fell by 27% YOY in 2020 📉
Crunchbase data shows that female-founded startups globally have received a total of $4.9 billion in venture funding in 2020, through mid-December, representing a 27 percent decrease year-over-year. Investors and entrepreneurs say it’s not clear if the decline is entirely due to COVID-19, however, the pandemic has disproportionately impacted women in the workforce.
Sequoia plants seeds in Europe 🌳
Sequoia, the Silicon Valley VC firm with investments in Google, Airbnb, DoorDash, WhatsApp, and Instagram to mention a few, has this year quietly set up shop in Europe. It hired its first partner in the EU, Luciana Lixandru, formerly of Accel. In an interview with Sifted, she talks about her new tasks to kickstart Sequoia’s European launch and finding Sequoia’s next $100bn moonshots on the continent. The move to Europe is widely seen as a vote of confidence that the tech ecosystem here is finally catching up with the US. Sequoia has in practice already been operating in Europe, with investments in Klarna, Skyscanner, and UiPath.
Sequoia has also launched its first European offshoot of its famous scout programme. One of the scouts is Roxanne Varza, director of French startup campus Station F.
What if Apple had bought Tesla 🤔
Elon Musk said that he tried to sell Tesla to Apple in 2018, but Apple CEO Tim Cook refused to meet him. The revelation, which was tweeted by Musk, comes a day after reports of Apple getting once again serious about getting into the automotive industry, a persistent rumor since 2015.
Is this the end of Investment Banks? 🏦
The Securities and Exchange Commission has approved NYSE’s direct listing plan that allows companies wanting to go public to sell shares directly to investors. Traditionally the IPO process has been done with the help of an investment bank that organizes the IPOs, markets them to institutions, and supports the stock via their trading desks.
Woman of the Week
Cathie Wood
In January 2014 Cathie registered ARK Investment Management LLC (ARK) at the US Securities and Investment Commission. She founded ARK to solely focus on investing in disruptive innovation. ARK believes that it can find large-scale investment opportunities in technological innovations that will transform how the world works. These areas are DNA sequencing, robotics, artificial intelligence, energy storage, and blockchain.
Prior to founding ARK, Cathie spent 12 years at AllianceBernstein as the CIO of Global Thematic Strategies. There she managed assets worth over $5 billion. Before that, she had co-founded Tupelo Capital Management, a hedge-fund with assets under management (AUM) of $800 million. Before that, she had 18 years of experience at Jennison Associates LLC.
Cathie has been described as “the best investor you’ve never heard of” by Bloomberg. However, I’m sure you will want to follow this woman very closely. Cathie has made headlines with her controversial bets. The most famous being her bet on Tesla, when no one believed in the stock she stated her bull case for the company and it reaching a value of $4,000 per share. Tesla’s stock is up 700% in 2020 and Tesla continues to be the largest holding of ARK.
In a recent interview with Bloomberg last Friday, Cathie said that the biggest upside surprises in the stock market are going to come from the genomic space. After this, the shares of Editas Medicine surged 50% on Monday this week. As said, you’ll want to follow Cathie very closely.
My Investing Tip: Institutional investment managers in the US that have over $100 million AUM are required to file a quarterly Form 13F. The 13F discloses the fund’s equity holdings. As such it can provide some valuable insights into what smart money is doing in the market. If you are curious to learn more about for example ARK’s holdings you can find its flagship funds ARKK (Ark Innovation ETF) holdings HERE. My tip is to google the fund you are interested in name plus 13f and you’ll be able to find its latest holdings on the SEC page.
Today ARK runs over $7 billion AUM and has become a disruptor in the industry. Cathie considers social media to be a big part of ARK’s success. ARK openly distributes all its research on social media.
Holiday Reading List
Books on investing
The Intelligent Investor is the book that Warren Buffett has said to be the best investing book ever written and that has set the grounds for his investing strategy. Benjamin Graham is considered to be the father of value investing – that is purchasing stocks that appear to be underpriced relative to their true value.
Think and Grow Rich was written during the Great Depression. Hill conducted research on wealthy individuals and published principles for success based on his observations. These principles include desire, faith, specialized knowledge, organized planning, persistence, and the sixth sense. Think and Grow Rich gives insights into the psychology of success.
I’ve included a couple of books that are more focused on psychology. This is because I believe that understanding psychology is essential to investing.
Thinking Fast and Slow might be one of the best books I’ve read. Daniel Kahneman, who won the Noble Prize for his research takes the reader through a tour of the mind and explains the two systems that drive the way we think: System 1 the fast and intuitive one, and System 2 the slower more logical one.
Influence Dr. Robert B. Cialdini explains the psychology of persuasion, why people say yes, and how you can apply these in everyday and business life. These principles include reciprocation, commitment and consistency, social proof, liking, authority, and scarcity.
Business books
These are some of my favorite recent business books
No Filter: The Inside Story of Instagram by Sarah Frier
It’s About Damn Time: How to Turn Being Underestimated Into Your Biggest Advantage by Arlan Hamilton
Trillion Dollar Coach: The Leadership Handbook of Silicon Valley’s Bill Campbell by Eric Schmidt, Jonathan Rosenberg, and Alan Eagle
Super Pumped: The Battle for Uber by Mike Isaac
The Moment of Lift: How Empowering Women Changes the World by Melinda Gates
Range: Why Generalists Triumph in a Specialized World by David Epstein
Thank you so much for reading this week’s newsletter. I would love to hear your feedback and please share this with a few friends you think would find this interesting. Wishing you and your loved ones a wonderful Holiday and a Happy New Year 💜