Cathie Wood Just Doubled Down on This Obscure Stock

A high-flying play...

Posted September 25, 2023

Dear Outsider,

If you’ve been reading us for some time, you’ve surely picked up on a few things.

We tell you the unvarnished truth...

We take responsibility for our mistakes...

And we always try to get to the good grass first.

Take the news that came out of Cathie Wood’s ARK Invest last week.

She just doubled down on an obscure stock that we’ve been writing about for over a year.

I’ll reveal that stock in a minute...

But if you’re not familiar, Cathie Wood is a prominent American investor and the founder, CEO, and chief investment officer (CIO) of ARK Invest, a New York-based investment management firm that specializes in actively managed exchange-traded funds (ETFs) focused on disruptive and innovative technologies.

She gained widespread recognition for her bold and often contrarian investment strategies, as well as her successful track record in identifying and capitalizing on emerging trends in the technology and innovation sectors.

She’s particularly known for her bullish views on companies involved in areas like electric vehicles, genomics, artificial intelligence, and blockchain technology. Her investment style involves a strong emphasis on long-term growth prospects and a belief in the potential for innovation to reshape industries.

ARK Invest's flagship ETF, the ARK Innovation ETF (NYSEARCA: ARKK), is one of the most well-known and successful ETFs managed by Wood. Under her leadership, ARK Invest attracted significant attention and investments, making her a prominent figure in the world of finance and technology investing.

So she’s obviously in the know, right?

You could say she’s one of the Wall Street insiders.

That should give her and her cronies an edge over the average investor.

But not so fast...

How were we able to get into this obscure stock before Wood’s massive hedge fund bought it?

You see, there’s a little-known Wall Street hack that gives the average investor the upper hand.

It’s how we’re able to get into stocks well ahead of the big hedge funds.

Here’s how it works...

One Trick to Rule Them All

You’ve heard of insider trading, right?

You may be thinking of the illegal act of purchasing shares of your own company using nonpublic information.

In fact, former Indiana Congressman Stephen Buyer was just caught red-handed in an insider trading scheme.

According to the Justice Department:

Buyer purchased shares of Sprint ahead of the April 29, 2018, public announcement that T-Mobile and Sprint would merge in a deal valued at $26.5 billion. Prior to the public announcement of the transaction by T- Mobile, executives at T-Mobile told a small, trusted group of consultants that they had retained to work on the deal, including Buyer, about the merger and directed them to keep the information confidential. Buyer breached his duty of confidentiality to T-Mobile and misappropriated that information by purchasing shares of Sprint across several brokerage accounts, including his own accounts, an account held jointly with his cousin, and an account in the name of a close, personal friend. Across these accounts, Buyer made more than $126,000 from the purchase and subsequent sale of Sprint stock after the merger was publicly announced.

In or about June through August 2019, Buyer again engaged in insider trading, this time trading in shares of Navigant Consulting ahead of Navigant’s acquisition by consulting and advisory firm Guidehouse.

Buyer was sentenced to 22 months in prison and fined $350,000 for the illicit acts.

But company insiders, meaning the C-suite executives, have a sort of backdoor way to play their own stock.

It’s still “insider trading,” so to speak, but it’s perfectly legal.

As long as they disclose their stock purchases to the SEC in what’s called a Form 4, they’re doing nothing wrong.

And this is exactly how we learned about the stock I mentioned above.

So as promised, that stock is Archer Aviation (NYSE: ACHR).

All I did was find the Form 4's filed by the company insiders and found that they've been on a shopping spree.

A year after my coverage, ARK Invest is buying shares.

In fact, it just purchased 250,000 more shares and now owns 10% of the company.

But we got in well ahead of Cathie Wood because we were playing off that insider information.

That’s how we beat the system.

How Did I Learn This Hack?

You see, I’m a bit of an insider myself, but it’s not what you think.

Doing a bit of genealogy research revealed something to my family.

A relative of mine helped found the New York Stock Exchange.

Get this...

On May 17, 1792, 24 stockbrokers and merchants gathered under a buttonwood tree outside 68 Wall Street to sign the Buttonwood Agreement, a document that would set the foundation for the New York Stock Exchange. Revered as one of the most influential financial documents in history, the Buttonwood Agreement sought to stabilize the securities market after the Panic of 1792. The agreement proposed the creation of a system in which brokers and merchants would trade only with each other and for a set commission per transaction. The contents of the document are short but sweet:

We the Subscribers, Brokers for the Purchase and Sale of Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at a less rate than one-quarter percent Commission on the Specie value and that we will give preference to each other in our Negotiations. In Testimony whereof we have set our hands this 17th day of May at New York, 1792.

Of the 24 signers, one name stands out for me: Bleecker, my grandmother’s maiden name. Two Bleeckers spilled their ink on the Buttonwood Agreement.

My grandmother was the last Bleecker in her line, but my uncle, who calls himself an amateur genealogist — he’s being modest — has done a lot of research on this, so here’s what we know.

Anthony Lispenard Bleecker, the namesake for Bleecker Street that runs through Greenwich Village in Manhattan, was a prominent banker, merchant, and vestryman at Trinity Church in Lower Manhattan. He owned a 106-acre farm where Bleecker Street is today and a house on Broadway. His brother and son were signers of the Buttonwood Agreement — and that makes Anthony Lispenard Bleecker my fourth great-great-grandfather, if I’m doing my math right.

But I decided not to join the ranks of Wall Street because of the rampant corruption.

Instead, I gather information from the outside looking in.

It's much more fun that way.

If you haven't already, sign up for my personal fanlist email so you can always stay up to date with what I'm tracking.

And if you want more actionable insights, I've put together a presentation on the top-five best-performing hedge funds and exactly what they're buying right now.

Don't be left behind.

Stay frosty,

Alexander Boulden
Editor, Outsider Club

After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing. Check out his editor's page here.

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