While other investors worry about the US slipping into recession next year, ARK Investment Management founder Cathie Wood thinks the recession is already here – and could last well into 2023.
“We believe we are already in a fairly significant inventory downturn, however we do not believe it will be anything remotely similar to the systemic recession and financial crisis of 2008-2009,” he said in an online ARK update.
From the mid-1940s to 2007, the average length of recessions was 10 months, according to research by the San Francisco Federal Reserve.
Wood noted that innovation generally has “strong resistance to recession” and used the recent shift in growth stocks as indicative of that trend.
She also estimated that inflation will decelerate within the next few months, given the course of the movement of the price of gold which, according to her, is a quantity directly linked to inflationary trends throughout her career.
Cathie Wood also weighed in on the fall in copper and the recent drop in oil, predicting that companies will try to offload much of their accumulated stockpiles, driving down prices.
The Adobe Digital Price Index recently recorded a decline, which convinces the investor that the downward trend in inflation will gradually prevail.
Innovation, he stressed, especially when it has technological features, is “deflationary”. But this is “good deflation”, he noted.
Source: Capital
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