Woodford Predictions

economic

redux wrote: »

Two years ago I had a modest lump sum of money to invest. I looked at Woodford or Fundsmith for a part of it. In mid Jan 16 there was a bit of a dip, and I made my mind up. Since that date Woodford is +5.3% and Fundsmith +59.8%

If there is a market dip ahead, which of those two is likely to be better afterwards, across 2 or 3 or 4 years?

As the BBC might disclaim, other funds are available. In the same time (23 months) my two pension funds, in a selection of investment trusts, are up 41% and 47%.

I recently saw an article from last June or July containing an interview with Mr Woodford. One notable detail was he had recently sold all of his holding in BAT, deciding it was now fully valued. He bought at £2.25 in the height of the tech shares mania, and sold at over £50. I worked out that in that timespan it was 19.6% a year. So being overweight in that and a couple of other tobacco companies shows where a fair amount of his success came from. But that's the past. Where is his next instinct or conviction move?.

He also kept Imperial Brand so hes not negative on the sector. IMO thats a mistake, BATS is a better investment then IMB (IMO) and BATS has been outperforming since he sold (of course its still early to tell so we will see).

His other investments like purple bricks and of course provident havent been doing very well lately. its a highly risky fund he is running (compared to say fundsmith) and its not for the faint of heart. he has names which are essentially ultra high growth stocks. I think its too much of a risk to hold and i think i can get better risk return elsewhere. I too invested some money but luckily not a lot. Will be exiting soon.

IanManc

bostonerimus wrote: »

A good company that doesn't deliver what it's customers expect will have a hard time surviving.

How can you define "a good company that doesn't deliver what it's customers expect" as a good company?

economic

OldMusicGuy wrote: »

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).

just saw this video.

so at 3.25 he thinks its all chinas fault? and so all money going into chinese stocks? what about US stocks? they have massively outperformed in £ terms. i dont think its to do with china. and i dont think its dangerous. its backed by strong fundamentals.

is this because he doesnt have a clue or because he is blaming his mistakes on something else?

he also clearly said he thinks he is right and the market is wrong. this is his failure. a good trader/investor always listens to the market and REACTS. how do investors in his fund know he is not unbiased? seems very biased to me.

also you have to trust what people are telling you?? hahahaha. he has no idea how the real world works.

Thrugelmir

redux wrote: »

Where is his next instinct or conviction move?.

Still buying shares in Provident Financial despite getting totally hammered in recent months. Believes that Brexit views are extreme. As a consequence there's value to be found in UK companies such as Lloyds Bank and Next.

On a wider level has said that people have been seduced into believing that making money on the stock market is easy, i.e. buy what is going up with no rational thought to risk. Forgetting that there's been a 10 year monetary policy experiment driving the markets.

bostonerimus

redux wrote: »

Two years ago I had a modest lump sum of money to invest. I looked at Woodford or Fundsmith for a part of it. In mid Jan 16 there was a bit of a dip, and I made my mind up. Since that date Woodford is +5.3% and Fundsmith +59.8%

If there is a market dip ahead, which of those two is likely to be better afterwards, across 2 or 3 or 4 years?

As the BBC might disclaim, other funds are available. In the same time (23 months) my two pension funds, in a selection of investment trusts, are up 41% and 47%.

My 70/30 portfolio is up 25% in the last couple of years. No where near as good as some of the returns I see for some of these IT portfolios, but at least better the Woodford. Looks like my trackers have me in the middle between Fundsmith and Woodford. Obviously its a ridiculously small sample and time span, but it might be illustrative of the boring nature of index investing and the wild ride you sometimes get with active funds.

Thrugelmir

bostonerimus wrote: »

Obviously its a ridiculously small sample and time span, but it might be illustrative of the boring nature of index investing and the wild ride you sometimes get with active funds.

There's been little volatilty in markets for some years. Hence the comment I quoted earlier from Woodward. When Central Banks policies are to buy debt and force people towards equity investment in a chase for yield. Then there can only be one result. Buying an index pushes valuations of every stock upwards. Irrespective of it's underlying trading performance.

bowlhead99

bostonerimus wrote: »

My 70/30 portfolio is up 25% in the last couple of years. No where near as good as some of the returns I see for some of these IT portfolios, but

...but you measure your returns in dollars rather than sterling...

. Obviously its a ridiculously small sample and time span,

and currency of measurement.

Your returns from the FTSE100 part of your portfolio would be under 6% in USD in the last three years, yet a UK investment trust would report them as being over 22% in the same time period because they report in GBP

but it might be illustrative of the boring nature of index investing and the wild ride you sometimes get with active funds.

it might be an apples to oranges comparison given the investment trusts you are talking about that beat your returns (and the Woodford fund that didn't) have a different mix of assets.

bostonerimus

bowlhead99 wrote: »

...but you measure your returns in dollars rather than sterling...
and currency of measurement.

Your returns from the FTSE100 part of your portfolio would be under 6% in USD in the last three years, yet a UK investment trust would report them as being over 22% in the same time period because they report in GBP

it might be an apples to oranges comparison given the investment trusts you are talking about that beat your returns (and the Woodford fund that didn't) have a different mix of assets.

The fall in sterling is inflating the returns from the foreign components of UK portfolios and as I'm investing in dollars in a US biased portfolio my comparison is a dubious, but the vast difference between Fundsmith and Woodford shows the difficulty in choosing that right active manager.

A UK based portfolio similar to mine of 50% US equity Index, 20% global equity and 30% global bond index owned in GBPs would have produced 30% return in the last 2 years, so a nice little boost over the US based return of 25%. But it's still boringly between Fundsmith and Woodford, which is the plan. Of course the asset makeup is vital and if someone owned 50% Woodford Equity Income and 50% Fundsmith they'd have a similar return to my index portfolio.

economic

How is everyone positioned going forward /what are your stock market views next year?

Stronger USD and US stocks continue to outperform?

My views are based on my current positioning which is: 65% US stocks, rest non US stocks, overweight US banks and tech stocks.

Thrugelmir

bostonerimus wrote: »

A UK based portfolio similar to mine of 50% US equity Index, 20% global equity and 30% global bond index owned in GBPs would have produced 30% return in the last 2 years, so a nice little boost over the US based return of 25%.

The impact of a devaluing £ though, has been to push inflation up here to twice the rate in the US. Swings and roundabouts as they say.