Cathie Wood: Market Misjudgments Inflation Trends; Inflation Data May Be Lower Than Market Expectations

According to Mars Finance, on January 18th, Cathie Wood, founder of ARK Invest, stated, "Experience over the past few years tells us that the downward trend in inflation is very clear. However, official data shows that inflation has stalled. Many people are wondering if the current market valuations, near historical highs, are a prelude to a correction. Looking back, from the 1990s until around 1997, and in the early 2000s, the market still experienced very strong rallies despite declining valuation multiples. We must assume that valuations will be compressed, and this assumption is incorporated into our bottom-up analysis of each company. Nevertheless, we remain quite optimistic about the inflation outlook, primarily due to: firstly, oil prices, and secondly, housing prices. You can see that homebuilder KB Home has lowered its prices by 7%, and other companies are following suit. In addition, productivity is improving significantly, and unit labor costs are falling sharply. Therefore, there are multiple deflationary pressures at present. The last factor I want to mention is technology." Our focus is entirely on technology-driven innovation, encompassing robotics, energy storage, artificial intelligence (especially), blockchain technology, and multi-omics sequencing in healthcare. We believe inflation data is likely to be lower than market expectations.