Jim Cramer literally drowns Cathie Wood’s ARK as flagship fund falters

The ARK Innovation ETF
ARKK,
-3.91%
has been falling precipitously. The flagship fund of star stock picker Cathie Wood has dropped 58% from its peak last February, including 30% in 2022 alone, as her high-growth bets shrivel up in the face of worries about Federal Reserve tightening that could begin as early as March. There’s an ETF, though, that aims to produce the opposite of what the ARK Innovation ETF does, called the Tuttle Capital Short Innovation ETF, with the ticker SARK
SARK,
+3.76%,
and it’s up 38% this year and 61% from November. Read MarketWatch interview with the founder of the fund.

So it’s almost inevitable what Cramer does next.

If that video isn’t rendering, it’s Cramer pouring a bottle of Cutty Sark whisky over a Noah’s Ark, complete with little animal cutouts with the ticker symbols of the fund’s holdings, like Robinhood Markets
HOOD,
-6.45%
and Teladoc Health
TDOC,
-3.08%.
“Now you know how to bet, if you think [Fed Chairman] Jay Powell wants to destroy the economy. You pour the sark over the ark and bet that they all drown and no one gets out alive,” said Cramer. Watch the full segment here.

Close observers noted that, actually, Cramer in February called Wood a genius.

The more nuanced discussion is whether Powell would stop his inflation-fighting hikes if the economy were to slump, and how high-growth stocks would fare. With the flattening of the yield curve — the gap between the 10-year
TMUBMUSD10Y,
1.843%
and the 2-year
TMUBMUSD02Y,
1.220%
yields is the lowest in more than a year — the bond market is making precisely that bet. Whether the Fed ending the rate-hike cycle early would then power tech stocks higher is anyone’s guess, but it’s food for thought for someone who thinks Cramer might be missing the proverbial boat.