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3 Views· 29 June 2022

From Economist To Billionaire - Cathie Wood's Hidden Rise To Fame



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In this video, I cover Cathie Wood's wild rise to fame.

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Disclaimer: I am not a financial advisor and this should not be taken as financial advice. This video is for entertainment purposes only. Please consult a certified financial advisor for assistance.

With a relatively secure job and millions of dollars, Cathie Wood had everything to lose. However, with a conviction stronger than you can imagine, she quit her job to start her own fund, Ark Invest, a small company that did not even have its own office at the time. No outside investors believed in Cathie’s vision, and even her friends ridiculed her for her decision. Just seven years later, Cathie crushed the S&P 500, became a celebrity within the financial space, and proved all of her doubters wrong. This is the story of Cathie Wood’s rise to fame. Cathie Wood was born in Los Angeles, California, on November 26, 1955, which was where she set her footing for her financial career. Her parents immigrated from Ireland and were open to letting her pursue any career she wanted. As the oldest sibling and a first-generation citizen, Cathie had a mission to blaze the trail for the future of her family. After graduating from an all-girls Catholic high school in 1974, she attended the University of Southern California with a double major in finance and economics. Because Cathie was the first person in her family to attend college, her family was dependent on her future. One day, while still a student at USC, she took a class where she met someone who would change her life forever, Arthur Laffer. Laffer is a renowned economist who specialized in supply-side economics and invented a famous economic theory named the Laffer curve. In her sophomore year, Arthur Laffer helped Cathie land her first job as an assistant economist at Capital Group, where she worked for three years. After graduating summa cum laude from USC, she began searching for a job. An asset management firm named Jennison Associates hired Cathie as a Chief Economist, an outstanding role for a recently graduated college student. This was a miracle, as Jennison was trusting a 25-year-old to crunch complicated economic data. In the early 1980s, the inflation rate was in the double digits (graph inflation rate) and productivity was at record lows. Two of the greatest economists of all time, Henry Kaufman and Milton Friedman, both thought that inflation was here to stay for years to come. However, Cathie Wood, a relatively new economist, thought that inflation was peaking. Not surprisingly, nobody believed her. Cathie explained how “for four years, nobody believed us. I would have to go up against Henry Kaufman one-on-one. I knew my numbers; I knew what I was talking about, but I had to convince them I did because of my youth.” This was obviously a bold claim to make at the time, especially since Cathie was so young. Her boss, Spiros Segalas, the co-founder of Jennison, explained how Cathie had “unbelievable, unwavering conviction.” Of course, in the end, Cathie was right. By 1983, the inflation rate dropped from 13.5% in 1980 to 3.2% in 1983. Segalas had Cathie in a nearby office so that he could constantly give her tasks. In retrospect, he said that “she was by far the sharpest. She always made me look good.” The decline in interest rates following a decline in the inflation rate set the stage for massive innovation ahead. New products were coming out left and right. Disposable cameras, personal computers, and DNA fingerprinting were all invented in the 1980s (do a sliding animation with old footage of 1980 disposable cameras, personal computers, etc.). It was during this time that Cathie decided that she wanted to switch from her job in economics to enter portfolio research.

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