Wooden Sister Cathie Wood said on Thursday that she did not think the stock market was in a bubble and defended her innovation-focused investment strategy.

"I don't think we are in the bubble that a lot of bears are talking about," Wood said in a media interview on Thursday. In the bubble, I remember that in the late 1990s, our strategy was cheered. Do you remember when analysts jump to predict that one by one is higher and the target price is higher than the other. But we don't have that situation right now. In fact, you will see a lot of IPO or (SPAC special purpose acquisition companies) emerge and eventually fail. We can't be any further from the bubble. "

ARK Innovation ETF, Wood's flagship fund, had previously been heavily bearish by the "big short" Michael Burry. At the end of the second quarter, Burry's Scion Asset Management held put options on 235500 ARK Innovation ETF shares (symbol ARKK), according to regulatory filings. Other hedge funds have also made short bets on ARK Innovation.

Mr Wood says most of the bearish sentiment on his fund is focused on inflation and higher interest rates. However, its macro argument focuses on the deflation brought about by innovation.

"the five innovative platforms around which we study: DNA sequencing, robotics, energy storage, artificial intelligence and blockchain technology, are almost all in their infancy." Wood said.

ARK Innovation's share price bottomed in May as investors switched to value stocks and pulled out of technology stocks in the first half of the year. ARK Innovation rose 9 per cent at the end of the second quarter, but is still down 7 per cent so far this year.