Woodford Patient Capital

EthicsGradient

Reaper wrote: »

OMG I've just read the fund's best performing stock is "Industrial Heat" who are trying to make cold fusion reactors assisted by and based on the work by debunked scientist Dr Rossi.

It's hokum. Unless he is being very risky and clever and riding a brief wave with the intention of selling before it collapses and becomes worthless this is a toxic share. That's almost 6% of the fund value.

More worrying it suggests his stock picking skills are not what they were and his appetite for risk is getting out of hand.
...
Quite how this unlisted stock has been judged to have risen in value is a mystery to me. If it were possible to short an unlisted share I would short this one.

That's the most worrying thing I've seen too. The earlier comment on this thread "I remember reading an interview where he was developing a concern that people genuinely believed him to be stupid" now makes a lot of sense. This is excellent evidence to believe him to be genuinely stupid. The huge leap in that stock was provided by other people falling for it - from Woodford's site:

Link Fund Solutions (which, as the Authorised Company Director of the LF Woodford Equity Income Fund and the appointed Alternative Investment Fund Manager of the Woodford Patient Capital Trust, has full responsibility for the unquoted security valuation process), is in receipt of details of the ongoing fundraising and has decided to increase the value of the Industrial Heat holding by 357%.

Woodford could do with reading MSE - "if it sounds too good to be true, then it is". I now have to work out when to sell my holding (that'll teach me not to keep an eye on the contents of ITs) - if I'd heard about this any other time, I'd sell at once, but it hurts to do that right after such a drop. Then again, I worry that it'll be hard to attract anyone to revive the share price if his belief in cold fusion get around more.

Midas

I've bought in at 61.95p. Looks oversold to me.

EdGasketTheSecond

SCOTTASLEF wrote: »

Had a 10k investment today as it definitely looks cheap now

Never try to catch a falling knife. Looks like you are down almost £1,000 already

Reaper

One hope for investors is the possibility of a takeover bid if the share price stays well below the nav
https://citywire.co.uk/wealth-manager/news/cazenove-patient-capital-could-attract-predator-after-share-slide/a1235590

AnotherJoe

The NAV though is very hazy, based on what various analysts have valued a bunch of early stage startups one of which by now must be a 10% investment, in a scam company that any rational analyst would write down to zero which means the current NAV should have 10% knocked off immediately. The fact any valuation is given to IH makes me wonder about the valuations of the other companies. Are any of them a Theranos Mk II? If they arent competent enough to spot IH as a scam what about the rest?

If I held CTY I'd be (a) very worried they even hold 1% of WPCT*, and (b) terrified they might attempt to take it over.

Though looking at CTY's holdings its so at odds with WPCT it seems unlikely they would. But then again it seems unlikely they'd have bought into it at all.
* On account of what it shows about their competence holding it for so long as it plummeted and not selling when WPCT invested in IH.

itwasntme001

itwasntme001 wrote: »

Invested too. Got 67p today as its fallen about 5%.

I actually sold out the day after i bought as i got nervous. Lost a few hundred quid. A painful lesson learnt the hard way. Never touching anything to do with woodford ever again.

EdGasketTheSecond

Just because the share price has dropped doesn't mean it is good value as there are doubts about some of the fund's investments and the validity of the NAV.

Reaper

The price dropped below 60 this morning which made me re-evaluate whether I should get in...

Reasons to buy:
* It's out of favour with sentiment pushing the price way below NAV. That is often a good time to buy.

Reasons not to buy:
* 75% of WPCT assets are invested in the same things as Woodford Equity Income, so if that is forced to keep selling that pushes the prices of the same assets down. [EDIT: By value estimates range from 60% - 90%]
* As it shrinks Woodford Equity Income may sell some WPCT to rebalance, pushing its price down.
* Shorters are out in force, which can also lower the price in the short term.
* It has high gearing at 16%, so downward pressures can be magnified.

On balance I think it has further to fall so I will not be buying yet. I realise there is a good chance I will miss the bottom as a result but the risk/reward is not one I feel comfortable with.

fun4everyone

Reaper wrote: »

Reasons to buy:
* It's out of favour with sentiment pushing the price way below NAV. That is often a good time to buy.

The NAV is a total scam.

MaxiRobriguez

These concerns are hardly new though they just been brought to the water cooler chat because of the equity income fund suspension. The sell-offs in patient capital will be more about people worrying about a similar liquidity run and also some people checking the performance for the first time in forever and seeing how mediocre it has done in the past three years.