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ARC and Vest CEO Kathy would one of Tensela's biggest bulls, the ev Maaker, the top holding in her flagship Art Innovation ETF, has this to say, I do not understand why Vest is a voting against Elon's pay package when they and their clients would benefit enormously if he and his incredible team meet such high goals. Kathy joint us Now for more, Kathy, thanks for making some time for us this morning. Good morning to you all. Do you think, Kathy, the incentives are well aligned?
Yes, we do. I do not believe any company anywhere near this size has ever delivered a compound annual rate of growth for ebit dot, which is a bottom line number of forty one percent over ten years. No company has done that. So yes, indeed the incentives are aligned. If he and his team are able to deliver on that number, the stock is going to outperform enormously.
Kathy, If by chance this proposal is rejected, would you consider shedding some of your TESLA position.
So I'm happy that the prediction markets are at ninety to ninety five percent in terms of this is going through so we don't have to think about that clearly. If Elon left, we think about it in two ways. One, we think robotaxis, he has them at the starting gate as of June, and now they're rolling out, and that AI project is well underway. If he had left five years ago, three years ago, it probably wouldn't be anywhere
near where it is. What we now think, though, is in order to capitalize on humanoid robots, which that's a much more difficult project. Yes, Elon's brilliance and the team he has attracted around him are going to be necessary to pull that off. Our price target twenty six hundred dollars in twenty thirty is ninety percent of that valuation is ROBOTAXI. We have very little for humanoid robots. If
humanoid robots evolve as quickly as Elon things. Now, remember that's Elon time, but he already has a running start because robotaxis are robots, they're electric, they're powered by AI. Those are the three innovation platforms that will power humanoid robots as well. So he's ahead of the game on that one as well. But I do believe he's the right leader to bring that part of the story to life as well.
Kathy, I've got to watcher this though. To follow up on Lisa's question, if you wouldn't sell if he wasn't CEO, then why should we pay him that much to be the CEO.
What I'm saying is we would feel comfortable with the ROBOTEXI part of the model, but we would not be able to build with confidence the humanoid robot part of the model. So over time, of course, as the story would depend more and more on that leg of the story, we would be taking our position down.
You talked earlier, Kathy, in the past couple of days about this reality check that's going on in the tech sector, and I understand that Tesla is sort of in its own place that you do hold them for the long term. How do you understand the reality check that's currently going on within a lot of the biggest tech stocks, and this sense of skepticism about whether they can keep growing at that rate versus the long term bullish bet.
You know, I'm really happy that there is so much skepticism out there. Anyone who went through the late nineties will remember there was no skepticism, and we had valuations based on the number of eyeballs on a website maybe ten years from then. We're not seeing that right now. We are seeing Wait a minute, they're spending a lot
of money on these data centers. This is a little bit of a different story than I was investing in, certainly in terms of when I say I the average investor was investing in with the mag six, those were just cash cows and had huge cash positions. Something's changing here. It's making the typical investor a little more I'll say skeptical. This is not just the cash register ringing anymore. This is wait, a big bet on the future. So I'm happy there's skepticism. I think it's a good thing.
Are you buying right now? Are you seeing a skepticism as a chance to build some of your portfolio?
Oh?
Sure, you know. And probably the most undervalued part of our portfolios is in life sciences healthcare, because we think that is going to present the most profound application of AI out there, and yet it is highly underappreciated because you know, healthcare analysts aren't comfortable with tech, and tech analysts aren't comfortable with healthcare, and you know, we've got a very siloed ecosystem in terms of the way research is done at ARC. We're very focused on the technologies
first and how they're going to scale across sector. So our analysts are organized by technology and we think there's a huge inefficiency there.
Kathy, thanks for being so generous with your time this morning. We appreciate it. Counthy, with that the unconvested CEO only on mask of Tesla, and a whole lot more