Cathie Wood sees big gains for stocks, crypto and Tesla: 'If we are right, the returns are enormous'

Published Mon, Sep 13 20216:15 PM EDTUpdated Mon, Sep 13 20218:00 PM EDT

Ark Invest's Cathie Wood, the popular investor who focuses on disruptive innovation, made a slew of bull calls Monday on the market, Tesla and cryptocurrencies at the annual SALT conference. "We are going to be in a highly deflationary world," the founder and CEO of Ark Investment Management said. "If we are right, the returns are enormous." Defying conventional wisdom on Wall Street, the red-hot investor believes that deflation, instead of inflation, is going to be a big investing theme going forward. She said costs are coming down drastically as new technology changes the world order. Wood on Tesla Wood has been a longtime Tesla bull and her conviction on the electric car marker hasn't dented even after the stock's massive rally in 2020. She said her base case for the stock is $3,000 in five years with the best case set around $4,000. Tesla is the biggest holding of Ark's flagship fund Innovation ARKK , accounting for more than 10% of the ETF. Asked about the recent trimming of her Tesla stake, Wood said it was a technical move. Wood on Crypto Wood said the price of bitcoin could surge tenfold in the next five years to $500,000 if companies continue to diversify their cash and institutional investors continue to allocate 5% of their portfolio to the space. The investor has grown increasingly bullish on ether, saying her portfolio now consists of 60% bitcoin and 40% ether. "Ether is seeing an explosion in developer activity thanks to NFTs and De-Fi," Wood said. "Our confidence in ether has gone up dramatically." She believes the new generation of retail investors is a force to be reckoned with and they will dominate the stock market and the crypto space. "Both crypto and equity markets are going to be powered by millennials," Wood said. Wood on China The investor is less optimistic about China where regulators have stepped up its crackdown on a variety of industries, including tech, education and gaming. "I think there's something going on there socially that the government is worried about," Wood said at the conference. "There's social unrest taking place there. ...We've taken our stakes down significantly." She recently dumped some of her Tencent, Baidu and JD.com stakes through several of her Ark ETFs in late July. "I don't think we will be hugely involved with China," Wood said.

Cathie Wood, founder and CEO of ARK Investment Management LLC, speaks during the Skybridge Capital SALT New York 2021 conference in New York, September 13, 2021.

Brendan McDermid | Reuters

Ark Invest's Cathie Wood, the popular investor who focuses on disruptive innovation, made a slew of bull calls Monday on the market, Tesla and cryptocurrencies at the annual SALT conference.