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  • FIRST POST
    • Zola.
    • By Zola. 2nd Dec 17, 7:04 PM
    • 1,155Posts
    • 441Thanks
    Zola.
    Woodford Predictions
    • #1
    • 2nd Dec 17, 7:04 PM
    Woodford Predictions 2nd Dec 17 at 7:04 PM
    https://www.ft.com/content/64bfef5c-d5d0-11e7-8c9a-d9c0a5c8d5c9

    Has a point about Bitcoin for sure, but for all else, how can he know for sure..other than it is inevitable, some day!
    Last edited by Zola.; 02-12-2017 at 7:11 PM.
Page 2
    • JohnRo
    • By JohnRo 4th Dec 17, 12:31 AM
    • 2,488 Posts
    • 2,231 Thanks
    JohnRo
    The problem then, assuming that's correct, is knowing when things are going bad before things are going bad which means holding when markets are going well.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • bostonerimus
    • By bostonerimus 4th Dec 17, 4:47 AM
    • 1,227 Posts
    • 685 Thanks
    bostonerimus
    I'm not sure I would say exceptional. He has an annualised gain of 8.1% over the last 18 years which is ok but not great. His performance over the last 10 years seems poor to me. For his ability to predict the dot com crash it seems he didnt do very well during the financial crisis.
    Originally posted by Prism
    I'm up 8.5% annual average for the last 30 years, so does that make me a fund manager super star? Woodford may have made people money, but it was perfectly possible to do that without him or his research by rebalancing a simple equity and bond tracker portfolio.
    Misanthrope in search of similar for mutual loathing
    • Linton
    • By Linton 4th Dec 17, 10:03 AM
    • 8,636 Posts
    • 8,611 Thanks
    Linton
    I'm up 8.5% annual average for the last 30 years, so does that make me a fund manager super star? Woodford may have made people money, but it was perfectly possible to do that without him or his research by rebalancing a simple equity and bond tracker portfolio.
    Originally posted by bostonerimus
    8.5% over the past 30 years is a lot easier than 8.1% over the past 18 years. 18 years ago was at the height of the tech bubble.

    Over the past 18 years the FTSE AllShare Total Return averaged 5%. So it would seem that a good manager can greatly outperform The Index.
    Last edited by Linton; 04-12-2017 at 10:24 AM.
    • Glen Clark
    • By Glen Clark 4th Dec 17, 10:24 AM
    • 3,919 Posts
    • 2,920 Thanks
    Glen Clark
    a good manager can greatly outperform The Index.
    Originally posted by Linton
    'good' or lucky?
    wheras a bad/unlucky fund manager can greatly under perform the index after charges.
    Problem is how do you pick the winning fund managers in advance?
    Probably easier to by pass the fund managers and pick the winning shares in advance. Not that I am recommending it.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Linton
    • By Linton 4th Dec 17, 11:14 AM
    • 8,636 Posts
    • 8,611 Thanks
    Linton
    'good' or lucky?
    wheras a bad/unlucky fund manager can greatly under perform the index after charges.
    Problem is how do you pick the winning fund managers in advance?
    Probably easier to by pass the fund managers and pick the winning shares in advance. Not that I am recommending it.
    Originally posted by Glen Clark
    Woodford didnt do well because he happened to randomly pick a few winning shares. He had a deliberately contrarian strategy of investing in defensive shares and so avoided the tech crash. This is why most successful funds are successful - the manager has a style that fits the circumstances.

    You dont have to pick a successful manager in advance, you pick a manager who invests in the type of shares you want to invest in. This contrasts with an index tracker where you invest preferentially in whatever happens to be flavour of the month.
    • BananaRepublic
    • By BananaRepublic 4th Dec 17, 12:35 PM
    • 932 Posts
    • 676 Thanks
    BananaRepublic
    'good' or lucky?
    wheras a bad/unlucky fund manager can greatly under perform the index after charges.
    Problem is how do you pick the winning fund managers in advance?
    Probably easier to by pass the fund managers and pick the winning shares in advance. Not that I am recommending it.
    Originally posted by Glen Clark
    There are some funds that consistently outperform the index, and it's pretty easy using basic statistics to show that if it is luck, then it is extraordinary luck. In other words, it's skill not luck.

    As to picking good managers, the only real guide we have is historical data, whereby one looks for consistent good performance over a long period, as opposed to a few outstanding years compensating for many mediocre ones, which would suggest chance. One of the funds I have owned for 18 years is the Jupiter European which has consistently done well.

    Interestingly many here like to balance a portfolio. Had I done that, I would have not done so well from the JE fund.

    So I guess the question is can one put together enough active funds with good future performance, given that some will have off years. Without doubt index funds are the safe option.
    • bostonerimus
    • By bostonerimus 4th Dec 17, 12:37 PM
    • 1,227 Posts
    • 685 Thanks
    bostonerimus
    8.5% over the past 30 years is a lot easier than 8.1% over the past 18 years. 18 years ago was at the height of the tech bubble.

    Over the past 18 years the FTSE AllShare Total Return averaged 5%. So it would seem that a good manager can greatly outperform The Index.
    Originally posted by Linton
    Over 18 years I am lagging Woodford by 0.5% a year...(I have 7.5% return), which is significant, but I'm way up on him since he got the sack, which is also significant. Some active managers will always beat their benchmarks and anyone can point out the winners after the fact. Looks like Woodford is reverting to the mean.
    Last edited by bostonerimus; 04-12-2017 at 12:42 PM.
    Misanthrope in search of similar for mutual loathing
    • talexuser
    • By talexuser 4th Dec 17, 2:21 PM
    • 2,304 Posts
    • 1,792 Thanks
    talexuser
    since he got the sack
    Originally posted by bostonerimus
    What on earth are you talking about?
    • fun4everyone
    • By fun4everyone 4th Dec 17, 2:25 PM
    • 850 Posts
    • 1,385 Thanks
    fun4everyone
    What on earth are you talking about?
    Originally posted by talexuser
    Have to say I wondered the same
    • bostonerimus
    • By bostonerimus 5th Dec 17, 4:21 AM
    • 1,227 Posts
    • 685 Thanks
    bostonerimus
    What on earth are you talking about?
    Originally posted by talexuser
    So was he pushed or did he leave on his own?

    In the statement released by Invesco Perpetual on Tuesday, Mr Woodford suggested his views about investment strategy had clashed with Invesco's senior management.
    Mr Woodford said: "My decision to leave is a personal one based on my views about where I see long-term opportunities in the fund management industry. My intention is to establish a new fund management business serving institutional and retail clients as soon as possible after 29th April 2014."

    http://www.telegraph.co.uk/finance/personalfinance/investing/10381449/Neil-Woodford-quits-Invesco-in-devastating-move.html
    Misanthrope in search of similar for mutual loathing
    • fun4everyone
    • By fun4everyone 5th Dec 17, 4:24 AM
    • 850 Posts
    • 1,385 Thanks
    fun4everyone
    Whatever your opinion on him, going around telling people he "got the sack" from what is written in that article is ridiculous. Absolutely nowhere does it say, or even imply, that that is what happened.
    • bowlhead99
    • By bowlhead99 5th Dec 17, 6:51 AM
    • 6,999 Posts
    • 12,608 Thanks
    bowlhead99
    Over 18 years I am lagging Woodford by 0.5% a year...(I have 7.5% return), which is significant, but I'm way up on him since he got the sack, which is also significant.
    Originally posted by bostonerimus
    Not really an apples to apples comparison anyway if you are a) predominantly investing in a different country ; b) you are investing in different asset classes while he has to fill a particular mandate in terms of delivering income from equities to his institutional investors; c) you are measuring your returns in a different currency
    So was he pushed or did he leave on his own?

    "Mr Woodford said: "My decision to leave is a personal one based on my views about where I see long-term opportunities in the fund management industry"
    Originally posted by bostonerimus
    NW: "Hi boss, I want to get a bigger salary and/or take a big slice of the management company profits on the funds I run. Oh and also to change the fee structures and remuneration structures. Also, I have as you know for some years been dabbling in private equity and younger companies to enhance long term returns, even though the companies don't produce income and my mandate is to run equity income funds for you ; I'd like complete free reign to do even more of that stuff. "

    Boss: "Well Neil, we disagree on all of those points. If you want those things, you would have to leave and set up your own shop. But I'd prefer you didn't do that because billions of our assets under management would leave to follow you, costing us tens of millions per year in fees. Your funds are basically half our AUM. We don't want to pay you all those tens of millions per year as extra bonuses though, because if we did that for you and all the other good fund managers we wouldn't make money for ourselves. And we can't give you a large ownership slice of Invesco Perpetual because our parent company listed on NYSE wouldn't really approve. And even if you did have more equity in the parent, it's not your firm and we can't sponsor you launching whatever funds you want with complete creative control.

    NW: Ok then I guess I do have to leave and set up my own shop.

    Bostonerimus: Hmm I see NW has left to set up a rival firm. .. They probably kicked him out.
    Last edited by bowlhead99; 05-12-2017 at 6:56 AM.
    • BananaRepublic
    • By BananaRepublic 5th Dec 17, 7:30 AM
    • 932 Posts
    • 676 Thanks
    BananaRepublic
    Not really an apples to apples comparison anyway if you are a) predominantly investing in a different country ; b) you are investing in different asset classes while he has to fill a particular mandate in terms of delivering income from equities to his institutional investors; c) you are measuring your returns in a different currency

    NW: "Hi boss, I want to get a bigger salary and/or take a big slice of the management company profits on the funds I run. Oh and also to change the fee structures and remuneration structures. Also, I have as you know for some years been dabbling in private equity and younger companies to enhance long term returns, even though the companies don't produce income and my mandate is to run equity income funds for you ; I'd like complete free reign to do even more of that stuff. "

    Boss: "Well Neil, we disagree on all of those points. If you want those things, you would have to leave and set up your own shop. But I'd prefer you didn't do that because billions of our assets under management would leave to follow you, costing us tens of millions per year in fees. Your funds are basically half our AUM. We don't want to pay you all those tens of millions per year as extra bonuses though, because if we did that for you and all the other good fund managers we wouldn't make money for ourselves. And we can't give you a large ownership slice of Invesco Perpetual because our parent company listed on NYSE wouldn't really approve. And even if you did have more equity in the parent, it's not your firm and we can't sponsor you launching whatever funds you want with complete creative control.

    NW: Ok then I guess I do have to leave and set up my own shop.

    Bostonerimus: Hmm I see NW has left to set up a rival firm. .. They probably kicked him out.
    Originally posted by bowlhead99
    It's not uncommon for people to leave and set up their own business so that they can have more of a say in how it is run rather than having to kow tow to someone else. To conclude that they kicked him out is unsupported by the evidence.
    • Glen Clark
    • By Glen Clark 5th Dec 17, 10:07 AM
    • 3,919 Posts
    • 2,920 Thanks
    Glen Clark
    an index tracker where you invest preferentially in whatever happens to be flavour of the month.
    Originally posted by Linton
    How so?
    As market cap increases the value of your holding increases, so you don't buy any more.
    Unless you mean the few new entrants and exits to the index? - but thats not monthly.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Glen Clark
    • By Glen Clark 5th Dec 17, 10:09 AM
    • 3,919 Posts
    • 2,920 Thanks
    Glen Clark
    since (Woodford) got the sack
    Originally posted by bostonerimus
    Have you been reading the Daily Mail ?
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Linton
    • By Linton 5th Dec 17, 10:33 AM
    • 8,636 Posts
    • 8,611 Thanks
    Linton
    How so?
    As market cap increases the value of your holding increases, so you don't buy any more.
    Unless you mean the few new entrants and exits to the index? - but thats not monthly.
    Originally posted by Glen Clark
    I mean variations in asset allocation. By definition any bubble is directly reflected in the indexes. A rational investor would rebalance to keep the allocations within bounds. Look at how various funds performed during the tech bubble. Woodford did very well, the FTSE100 and S&P indexes didnt.
    • atush
    • By atush 5th Dec 17, 12:02 PM
    • 16,386 Posts
    • 10,139 Thanks
    atush
    Over 18 years I am lagging Woodford by 0.5% a year...(I have 7.5% return), which is significant, but I'm way up on him since he got the sack, which is also significant. Some active managers will always beat their benchmarks and anyone can point out the winners after the fact. Looks like Woodford is reverting to the mean.
    Originally posted by bostonerimus

    He didnt get the sack, he set up on his own. Dont be a numpty
    • OldMusicGuy
    • By OldMusicGuy 5th Dec 17, 12:15 PM
    • 207 Posts
    • 382 Thanks
    OldMusicGuy
    Interesting video here:

    http://www.hl.co.uk/news/articles/neil-woodford-video-our-view

    Woodford still has some contrarian views and I think you either buy into them or you don't. You only need to watch the first five minutes to get his core perspective, his reaction to the question at about 4:40 is interesting (he clearly doesn't like the fact his funds are seen as underperforming).
    • Glen Clark
    • By Glen Clark 5th Dec 17, 12:16 PM
    • 3,919 Posts
    • 2,920 Thanks
    Glen Clark
    I mean variations in asset allocation. By definition any bubble is directly reflected in the indexes. A rational investor would rebalance to keep the allocations within bounds.
    Originally posted by Linton
    Companies tend to be more diversiied the bigger they get - even when they stay in the same sector. M&S more diversified than the market stall it began as etc.
    Look at how various funds performed during the tech bubble. Woodford did very well, the FTSE100 and S&P indexes didnt.
    Originally posted by Linton
    You can pick whichever time period suits your argument.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • bostonerimus
    • By bostonerimus 5th Dec 17, 1:27 PM
    • 1,227 Posts
    • 685 Thanks
    bostonerimus
    NW: "Hi boss, I want to get a bigger salary and/or take a big slice of the management company profits on the funds I run. Oh and also to change the fee structures and remuneration structures. Also, I have as you know for some years been dabbling in private equity and younger companies to enhance long term returns, even though the companies don't produce income and my mandate is to run equity income funds for you ; I'd like complete free reign to do even more of that stuff. "

    Boss: "Well Neil, we disagree on all of those points. If you want those things, you would have to leave and set up your own shop. But I'd prefer you didn't do that because billions of our assets under management would leave to follow you, costing us tens of millions per year in fees. Your funds are basically half our AUM. We don't want to pay you all those tens of millions per year as extra bonuses though, because if we did that for you and all the other good fund managers we wouldn't make money for ourselves. And we can't give you a large ownership slice of Invesco Perpetual because our parent company listed on NYSE wouldn't really approve. And even if you did have more equity in the parent, it's not your firm and we can't sponsor you launching whatever funds you want with complete creative control.

    NW: Ok then I guess I do have to leave and set up my own shop.
    Originally posted by bowlhead99
    I think this is probably pretty close to the way it happened. I bet there was scuttlebutt about Woodford setting up a new firm for a while and Invesco management were "annoyed" with him doing his own thing. Management and Woodford made demands that neither liked. maybe "sacked" was too strong, but the press released sounds like it was a welcome separation on both parts.
    Misanthrope in search of similar for mutual loathing
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