re: The ARKK’s about to take on water?

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EXHIBIT A? I offer you the Janus Capital Group. Janus, you'll undoubtedly recall, was the hottest of hot fund companies during the Internet bubble, with every one of its go-go mutual funds seemingly going in only one direction: up, up and up. In early 2000, at the peak of the bubble, half the money pouring into mutual funds from investors went to Janus. At its peak, in September 2000, Janus had $318 billion in assets.

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But when the bubble burst, the Janus family of growth funds was absolutely crushed. From September 2000 to September 2002, the flagship Janus Fund lost almost 60 percent of its value, as did Janus Worldwide, another big-name fund. Janus Mercury and Janus Twenty were both down more than 60 percent. It turned out that Janus's fund managers had completely lost their minds in the bubble, far more than growth managers at many other big fund complexes. There was little or no investing discipline; many of the fund managers bought the same small handful of stocks; their portfolio construction was terrible; and they had stopped even thinking about whether the stocks they were buying were overvalued -- much less worrying about it. To make matters worse, Janus spent the immediate aftermath of the bubble in denial. "It was a very insular culture," says Russel Kinnel, Morningstar's director of research. "So many of the fund managers didn't know any other way."

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