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Cathie Wood Sees Deregulation as 'Critically Important'

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Bloomberg 06:35 · 1858 Views

Ark Investment Management CEO Cathie Wood says the market sees that the policies of the Trump administration will support the growth of the US economy. She speaks on "Bloomberg The Close."

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Transcript

  • 00:00 I am curious as to I guess what type of euphoria you're feeling and more importantly what type of caution if at all you're feeling as well?
  • 00:08 Well,
  • 00:09 if you look at our
  • 00:11 the performance of our funds since the
  • 00:14 election,
  • 00:16 they've far out
  • 00:18 outpaced the market, outpaced
  • 00:20 the MAG 7 and so forth.
  • 00:22 So
  • 00:23 I think of what the market is beginning to say is this administration is going to support
  • 00:29 innovative strategies,
  • 00:32 anything that will accelerate the growth,
  • 00:35 increase the productivity
  • 00:37 of our economy.
  • 00:39 Deregulation is
  • 00:41 going to be, we think a very large part of that
  • 00:44 tax incentives, tax rate cuts as well.
  • 00:48 You mentioned
  • 00:49 the the
  • 00:50 perhaps the cutback in government spending programs.
  • 00:54 You know, in our mind, government spending longer term
  • 00:57 is taxation and one form or the other it's got to be paid
  • 01:01 for with
  • 01:02 increased taxes now,
  • 01:05 increased taxes later or
  • 01:08 or basically
  • 01:09 through inflation inflating away the debt.
  • 01:13 And
  • 01:14 so we think that's going to be very positive, this drive towards
  • 01:19 increasing the efficiency of the government, which will then limit
  • 01:25 the kinds of tax increases we've seen
  • 01:28 over the last few years
  • 01:30 and perhaps even continue to rollback taxes, leaving more for the private sector at the expense of sort of inefficiencies in the government sector.
  • 01:41 So Kathy, following on that, the president-elect has
  • 01:44 outlined a number of initiatives that he wants to put in place as soon as he is inaugurated on January 20th.
  • 01:51 Of the different proposals that pro growth items that he has on his To Do List, which do you think needs to be prioritized?
  • 01:58 Is it tax cuts?
  • 01:59 Is it
  • 02:01 immigration reform?
  • 02:02 Is it
  • 02:03 tariffs?
  • 02:03 Is it
  • 02:04 deregulation?
  • 02:05 Which of those things should be at the top?
  • 02:09 Well,
  • 02:10 consider the source.
  • 02:11 So I'm my answer might be different
  • 02:14 from
  • 02:15 president-elect Trump's answer.
  • 02:16 But
  • 02:17 in terms of turbocharging growth,
  • 02:20 I think if tax rates, if, if this administration is going to cut tax rates,
  • 02:26 the most important thing it has to do is make sure they're retroactive to January 1st of 2025.
  • 02:35 Because,
  • 02:36 and we learned this from the Reagan administration,
  • 02:39 if,
  • 02:40 if they defer
  • 02:42 or or phase in tax
  • 02:45 cuts, businesses and individuals will wait
  • 02:49 for the lower tax rates and that can weaken
  • 02:52 economic activity.
  • 02:54 Beyond that deregulation,
  • 02:58 critically important,
  • 03:00 I think one of the reasons venture capital has had so much trouble during the last few years
  • 03:07 and
  • 03:08 strategies
  • 03:10 in the innovation space, especially in life sciences
  • 03:14 is because M&A has been prevented by the FTC.
  • 03:19 That is going to change.
  • 03:21 So we are finally going to
  • 03:24 have price discovery
  • 03:28 as strategic
  • 03:30 bid for these innovative companies.
  • 03:32 We'll see how much they're really worth.
  • 03:34 This has not happened in a long time.
  • 03:37 We also think, therefore, there will be liquidity events for private companies into the public world, which is also going to become very important.