The way Cathie Wood manages ARK strikes me as institutional size day trading, and having a “five year vision” is no excuse to catch falling knives or accumulate recklessly.
I don’t know enough about this fund to agree or disagree, but I will say that this “selling to take profits” idea mentioned in the article really rubs me the wrong way: in my experience that’s not something people interested in long term plays do.
Kelly betting straightforwardly has you reduce your position size as your edge goes down, which happens when the price moves in your favor more than the fundamentals have changed. It's exactly correct.
Sure, but in the article/convo a distinction is made between selling to take profits and selling when there is a shift in expectations. That implies that taking profits here is a purely speculative move.
If there is no shift in expectations, then you should reduce your position as the price goes up, per Kelly, i.e. "take profits". It's a great heuristic. If you wouldn't buy something at the current price, why hold it?
taking profits is always a purely speculative move, but a good one. Taking profits doesn't mean you liquidate entirely, it just reduces risk.
E.G. I believe in crypto, but when btc went from 20k - > 50k i took all my profit except my initial investment. It was purely speculative sure, but it drastically reduced my risk without reducing too much profit potential if i still believe in the long term.
Talk about initial investment is not meaningful. Money is fungible. The only relevant question is what the current optimal percentage of bankroll to allocate is given the price and the expectation of future prices.