Woodford Predictions

bostonerimus

Prism wrote: »

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.

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.

Linton

bostonerimus wrote: »

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.

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.

Glen_Clark

Linton wrote: »

a good manager can greatly outperform The Index.

'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.

Linton

Glen_Clark wrote: »

'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.

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

Glen_Clark wrote: »

'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.

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

Linton wrote: »

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.

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.

talexuser

bostonerimus wrote: »

since he got the sack

What on earth are you talking about?

fun4everyone

talexuser wrote: »

What on earth are you talking about?

Have to say I wondered the same

bostonerimus

talexuser wrote: »

What on earth are you talking about?

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

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.