"Female Warren Buffett": AI will double GDP within a decade, and Musk's trillion-dollar compensation is reasonable

Key points:

• The integration of five major technology platforms, namely robotics, energy storage, artificial intelligence, blockchain technology, and multi - omics sequencing, will significantly boost productivity in the next 5 to 10 years, double the real GDP growth rate, and trigger deflation.
• The moment of truly disruptive innovation is approaching. In the next five years, truly disruptive innovation will bring an annual compound return rate of approximately 40% to 45%.
• Fully support Elon Musk's trillion - dollar compensation plan. If Tesla makes the expected progress in the field of humanoid robots, the stock price of Tesla will exceed $2600.

On October 14th, Cathie Wood, known as the "female Warren Buffett," was interviewed on the "All - in Podcast" and elaborated on the prediction of the macro - economy influenced by AI - led disruptive innovation.

As the founder and CEO of Ark Invest, Cathie believes that the integration of the five technology platforms of robotics, energy storage, artificial intelligence, blockchain technology, and multi - omics sequencing will significantly enhance productivity in the next 5 to 10 years, double the real GDP growth rate, and lead to deflation.

Cathie also revised the bull - market target price of Bitcoin to $1.5 million and emphasized opening up innovation investment channels for retail investors to alleviate the problem of wealth polarization. In addition, she expressed her support for Elon Musk's trillion - dollar compensation plan.

The following is a selected version of the interview:

Host: Welcome, Ms. Cathie Wood from Ark Invest. The Ark Innovation ETF of your company is currently trading close to its 52 - week high, with a return rate of over 170% last year and an asset management scale of $17 billion.

Cathie: I'm very honored to be on the show. I'll talk about how the world will transform in the next 5 to 10 years, how the real GDP growth will accelerate, and to what level inflation will fall, and analyze the reasons behind it.

01. Disruptive innovation - driven enterprises will experience explosive growth

Cathie: The innovation timeline since the 18th century shows that we've gone through two great eras. The first era was from the late 19th to the early 20th century. The inventions of the telephone, electricity, and the internal combustion engine greatly promoted GDP growth. Before that, for about 400 years, the average annual growth rate of real GDP was only 0.6%. Then, we entered a 125 - year period of 3% real GDP growth.

Currently, we're witnessing the simultaneous development of multiple innovation platforms. This is the first time in 125 years that five major platforms, covering 15 different technologies, have emerged. These five platforms include robotics, energy storage, artificial intelligence, blockchain technology, and multi - omics sequencing.

We expect that in the next 5 to 10 years, productivity will be strongly enhanced. The tax plan of the Trump administration will further accelerate this process, pushing the real GDP growth rate from 3% in the past 125 years to over 7%. Another expected phenomenon is that inflation will be significantly lower than the market expectation. After getting rid of the impact of tariffs, we may see an inflation rate of 0% or even lower.

The key to this explosive growth lies in the integration of these technologies. For example, autonomous driving combines robotics, energy storage, and artificial intelligence. And the application of AI in healthcare is the most profound, which is the integration of sequencing technology and AI. We believe this is the "dark horse" area with the lowest market pricing efficiency.

From 2019 to 2024, the market value of the six major technology stocks (Apple, Microsoft, Amazon, Alphabet, Meta, and NVIDIA), excluding Tesla, tripled, while the market value of truly disruptive innovation - driven enterprises only increased by 30%. This is because investors prefer safe assets and only invest in stocks with the largest market capitalization and the most abundant cash. Now, the moment of truly disruptive innovation is approaching. Risk appetite and investment horizons are expanding. We expect that in the next five years, truly disruptive innovation will bring a compound annual return rate of approximately 40% to 45%.

02. Bitcoin will reach $1.5 million in five years

Host: You predicted that Bitcoin will reach $3.8 million in five years. Can you explain the calculation basis?

Cathie: I need to correct that. Our official bull - market prediction is $1.5 million. As for $3.8 million, it's calculated based on modern portfolio theory. If Bitcoin is included in the investment portfolio with an optimal weight (maximizing the Sharpe ratio), it will push the price to $3.8 million. Surprisingly, the position size obtained from this analysis accounts for 19% of the diversified investment portfolio.

Host: When relatives and friends ask "how much Bitcoin should I hold," what advice do you give privately?

Cathie: I've long advised my children to use the average - cost method to buy. Then, the holding amount is determined according to their risk tolerance.

03. Support for Musk's trillion - dollar compensation plan

Host: Market signals show both green and red lights. Do you actively respond to these signals or focus on a horizon of more than five years? How do you manage risks?

Cathie: Our investment portfolio is more volatile than the benchmark index. In a bear market, investors tend to follow the benchmark closely, while we do the opposite. The way we control risks in a bear market is to focus on our highest - conviction holdings. We have a scoring system based on factors such as management, execution, moat, valuation, and argument risk. In a bull market (I think we're in an expanding bull market), we diversify our investments.

Host: What do you think of Musk's trillion - dollar compensation plan?

Cathie: Interestingly, this plan is highly similar to our model. Our five - year target price is $2600. If Tesla makes the expected progress in the field of humanoid robots, our model may underestimate its potential. Musk's compensation plan is crucial.

I hope more CEOs of enterprises can follow his example. Musk can only get paid when he reaches the milestones, which is a strong incentive for him. He pursues excellence based on first - principles, physics, and milestone - orientation.

Host: As a stock picker, do you care about the company's registration location? Do you think there are fundamental business risks in Delaware now?

Cathie: We're not activist investors. I have to say carefully that we're moving out of Delaware.

Host: Why? Don't you trust its predictability?

Cathie: They're unpredictable now and show activism. In the compensation plan, what right does Delaware have to override shareholders? The shareholder who sued Tesla only held 10 shares but could influence everything.

Host: Thank you very much for sharing your valuable insights.

Cathie: I'm glad to communicate with you all.

This article is from "Tencent Technology", author: Wuji. Republished by 36Kr with permission.