Woodford Predictions

bowlhead99

bostonerimus wrote: »

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.

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

bostonerimus wrote: »

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"

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. .. :think: They probably kicked him out.

BananaRepublic

bowlhead99 wrote: »

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. .. :think: They probably kicked him out.

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

Linton wrote: »

an index tracker where you invest preferentially in whatever happens to be flavour of the month.

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.

Glen_Clark

bostonerimus wrote: »

since (Woodford) got the sack

Have you been reading the Daily Mail ?

Linton

Glen_Clark wrote: »

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.

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

bostonerimus wrote: »

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.

He didnt get the sack, he set up on his own. Dont be a numpty

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

Linton wrote: »

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.

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.

Linton wrote: »

Look at how various funds performed during the tech bubble. Woodford did very well, the FTSE100 and S&P indexes didnt.

You can pick whichever time period suits your argument.:)

bostonerimus

bowlhead99 wrote: »

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.

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.

talexuser

bostonerimus wrote: »

maybe "sacked" was too strong,

or maybe it was completely and utterly wrong.