Powerhouse investors talk shop at USFSP

While education is typically the bedrock of a successful career, there is no substitution for experience; Cathie Wood, founder of ARK Invest, and Tom Frederick, founding partner of TampaBay.Ventures, have that in spades.

When Wood moved her multi-billion dollar investment firm from New York City to St. Petersburg last year, it was one of the most celebrated additions since MLB granted the city a baseball franchise in 1995. Frederick co-founded Tampa-based business technology company Zeno Office Solutions and sold it to Xerox in 2013, after reaching $65 million in annual revenue.

The University of South Florida Muma College of Business welcomed the two local investors to the Kate Tiedemann School of Business and Finance at the St. Petersburg campus for a fireside chat Wednesday night. Allen Clary, adjunct professor of entrepreneurship and co-founder of the Tampa Bay Wave startup accelerator, moderated the discussion with a packed audience of students and business leaders.

“Every single person you ever meet knows something that you don’t,” said Frederick to open the event. “And I say that because every time I see Cathie interact … you have her full focus, and she is always learning and trying to glean and get information from people.”

Much of the conversation centered on Wood’s unique insights, as Bloomberg named the CEO and Chief Investment Officer one of 50 people worldwide defining global business. Frederick called her a “futurist” and said ARK’s portfolio has replaced the Nasdaq stock exchange as a haven for new technology.

“If you really want disruptive innovation, then you don’t want Nasdaq – you want ARK,” Wood proclaimed later in the discussion. “And what I love about investors today – we’re getting a lot of credit for educating a generation of investors, and we’re going to turbocharge that.”

Wood advocates for investment in her firm’s five pillars of disruptive innovation: genome sequencing, robotics, artificial intelligence, blockchain technology and energy storage. She said those platforms “dwarf anything seen in history” with respect to electricity, the telephone and the automobile.

She reiterated her belief that those emerging technologies would transform the world sooner rather than later. Disruptive innovation’s current valuation is roughly $7-8 trillion, explained Wood, or about 10% of the global equity market.

The renowned investor believes that number will soon soar to $210 trillion and encompass over 60% of the market.

“If we’re right, the disruptive innovation is going to disturb – if not destroy – a lot of the traditional world order,” said Wood.

Wood (center) said, “there is innovation written all over the Tampa Bay region.” Clary (left) and Frederick noted the impact ARK Invest relocating to St. Petersburg had on the city.

She believes the pandemic’s effect on innovation stocks was a “dry run” for the years ahead. Wood noted that the markets dropped 35% immediately following the “disaster,” with ARK losing 46% of its value.

She said the company’s portfolio then shot up 360% in less than a year.

While Wood and her team believed that surge would continue to multiply, she blamed the recent downturn on monetary policy, inflation, supply chain disruptions and an imbalance between supply and demand.

Wood believes this year’s bear market is coming to an end – as long as “the Fed does not destroy much more than it already has.”

She also noted that short interest in her flagship Ark Innovation ETF (ARKK) has increased to 20%. However, Wood remained defiant in the face of doubters.

“Can you imagine when the market understands that innovation is going to be the way we’re going to get out of these problems and the Fed pivots?” she asked rhetorically. “It’s bad business to bet against innovation.”

Frederick noted that every major city in America courted Wood and her firm during the relocation process last year. She expressed her happiness and confidence in choosing St. Petersburg.

Wood said, “there is innovation written all over the Tampa Bay region,” and added that it’s in the area’s DNA. Every young person in the packed auditorium, said Frederick, should be “pumped” that a resource and company like Wood and ARK moved to the city.

She credited the community for welcoming her and her team with open arms and for the staunch belief that the region can become an epicenter for innovation.

“Not Miami,” added Wood to a large round of applause.

The discussion closed with the two investors offering a final piece of advice to students. Frederick said those just entering the workforce should go above and beyond what is asked of them, and said that anyone with motivation and a solid work ethic has the ability to “rise so fast” in light of the current workforce climate.

Wood told students to “get on the right side of change,” particularly regarding disruptive innovations in financial services. She warned against becoming “a cog in the wheel” and said that if employees love their company and believe in its future, they should try to obtain equity in the business as quickly as possible.

“But, what I was doing, was making sure that my boss looked brilliant,” said Wood. “That was my role. That’s how I approached the job.”