Provident Financial - Woodford, Barnett & Darwall

Sally57

When Provident shares fell by about 20% in June, Neil Woodford said he was still very confident in the company's management and its future prospects. Today the shares have fallen another 61% and the press are waiting for his statement/thoughts on this now. It's a very big hit for Woodford because he invests in Provident across all of his funds including the funds he manages at St James Place.

As per the thread title, he is not the only high profile fund manager, however, he has the most to lose over all his managed funds. The other big losers are Mark Barnett with Invesco Perpetual, Edinburgh IT and Alexander Darwall at Jupiter European Opportunities IT.

Kernel_Sanders

It's now 70%, and Radio 4 are having a feature on it during its news programme today (1-1.45pm).

coastline

Charts can be very handy...

http://www.iii.co.uk/sites/default/files/provident.png

http://www.bourbonfm.com/sites/default/files/users/PatrickBourbon/Main%20Stages%20in%20a%20Bubble.png

jimjames

Even Woodford gets it wrong sometimes. As long as it's less than the times he gets it right and still beats benchmark I think investors will stick with him.

The market may well have overdone it today but who knows where the price will be in a few months.

Sally57

jimjames wrote: »

Even Woodford gets it wrong sometimes. As long as it's less than the times he gets it right and still beats benchmark I think investors will stick with him.

The market may well have overdone it today but who knows where the price will be in a few months.

In some ways I agree but there has been major warning signals on Provident and he has a huge amount of money invested in them across his funds and via SJP so you would have thought he would have monitored the company's structure etc

Regarding the market over-reaction today and the price - maybe a time to 'buy' for a brave investor?

NotSkint

jimjames wrote: »

Even Woodford gets it wrong sometimes. As long as it's less than the times he gets it right and still beats benchmark I think investors will stick with him.

The market may well have overdone it today but who knows where the price will be in a few months.

Capita, AstraZeneca, Allied Minds, G4S, Next all spring to mind as losing value after Woodford goes on record defending their fundamentals.
Hopefully all will be blips for his fund and his high conviction will pay off in the end for his investors; but I do wonder.

TrustyOven

Sally57 wrote: »

When Provident shares fell by about 20% in June, Neil Woodford said he was still very confident in the company's management and its future prospects. Today the shares have fallen another 61% and the press are waiting for his statement/thoughts on this now.

A quote I saw the other day:

Friedrich Nietzsche — 'I'm not upset that you lied to me, I'm upset that from now on I can't believe you.'

I'm sure Woodford wasn't lying, but I do wonder if this situation causes people to no longer trust / beleive him?

jimjames

Sally57 wrote: »

Regarding the market over-reaction today and the price - maybe a time to 'buy' for a brave investor?

I guess it depends how quickly they rectify - whether they reverse the new collection structure or continue to try it in the hope it improves.

HardCoreProgrammer

Over the last year, the performance of Woodford Equity Income has not been good (even lags the Woodford Income Focus which according to the prospectus, is expected to have lower returns). I saw an article in the Telegraph about perhaps income funds would underperform in the short to medium term, so considering swapping for Fidelity Special Situations or Lindsell Train UK Equity.

sorcerer

I am not sure he can now justify holding a share, that was 4% of his holdings no longer paying dividends in an Equity Income fund, going forward. I sold out of WPCT earlier this year, because it hasn't made a penny of profit since starting. I replaced it with something that went up 10% in the two months.

I would say that I am beginning to lose faith. I try to never fall in a love with a share, what counts for me, is that are you making me any money? I don't care about anything else.

He has had to defend him self at lot recently, as you say many companies he holds have lost a lot of money, might not be a problem if it's his smaller holdings. But it's not, it his the biggest holdings that are falling apart.

I see a lot of people justifying it by saying but looks at his history over the last 20 years or so. But unforntuely I can't make any money on investments from 20 years ago. It doesn't mean he will do well in the next 20 years.

NotSkint

HardCoreProgrammer wrote: »

Over the last year, the performance of Woodford Equity Income has not been good (even lags the Woodford Income Focus which according to the prospectus, is expected to have lower returns). I saw an article in the Telegraph about perhaps income funds would underperform in the short to medium term, so considering swapping for Fidelity Special Situations or Lindsell Train UK Equity.

I agree the funds performance hasn't been great. Over a relatively short period it is too early to say whether his high conviction will pay off or not. He has a lot of unquoted companies, which may give a good boost if they perform as he expects, but I am a bit concerned that his analysis is not picking up some of the problems with the quoted companies so who knows.
I will see what effect this all has on the fund price later today and then may top up by rebalancing if it has moved enough to upset my allocations.
Definitely one of my poorer performing funds.