Interesting viewpoint?

talexuser

A thoughtful article from Murray International. I bought it for the grandkids in 2013 and sold out last year for a 40% gain, because a lot of that was due to the Referendum devaluation. It seems some managers with a proven long term record have had difficulty adapting to the era of QE and central bank support. Do you think we are storing up problems for the future?

https://www.trustnet.com/news/2272401/-biggest-threat-to-capitalism-now-central-banks-says-murray-internationals-bruce-stout?utm_source=Trustnet%20Newsletters&utm_campaign=6a8930b566-EMAIL_CAMPAIGN_2019_02_15_11_57_COPY_01&utm_medium=email&utm_term=0_2314bd04ee-6a8930b566-76889477

masonic

The impact will likely not be felt until the next major economic disaster. If that comes in the short term then the same tactics will be much less effective. If it comes in the longer term, perhaps we will have had chance to return to something resembling normality. What's clear is that although things look quite healthy, there are cracks beneath the surface and they've been papered over through the manipulation of monetary policy.

Thrugelmir

The unwinding has already commenced. Other than Japan , QE is over. The Fed has commenced reducing it's balance sheet. The BOE's support schemes to the banks are in the process of starting to be repaid. Likewise the banks are progressively meeting higher and higher levels of regulatory capital requirements.

Johnnyboy11

talexuser wrote: »

A thoughtful article from Murray International. I bought it for the grandkids in 2013 and sold out last year for a 40% gain, because a lot of that was due to the Referendum devaluation. It seems some managers with a proven long term record have had difficulty adapting to the era of QE and central bank support. Do you think we are storing up problems for the future?

I'd put Woodford fimrly in that camp. Sure, his fund is up 13% over the past 5 years, but the GBP has depreciated by about 23% and inflaion has eroded say another 10%. That's a staggering 20% or £1 billion of UK investors wealth destroyed. I was one of those investors

masonic

Johnnyboy11 wrote: »

I'd put Woodford fimrly in that camp. Sure, his fund is up 13% over the past 5 years, but the GBP has depreciated by about 23% and inflaion has eroded say another 10%. That's a staggering 20% or £1 billion of UK investors wealth destroyed. I was one of those investors

Woodford also changed his investment strategy significantly, to put more focus on smaller UK-focused companies and high risk start ups at possibly the worst time in 50 years to back such companies over larger globalised companies.

But those changes probably don't account for all of his 30+% underperformance of the sector average over the last 3 years. His old Invesco Income fund has fared similarly badly since he left it.

talexuser

masonic wrote: »

But those changes probably don't account for all of his 30+% underperformance of the sector average over the last 3 years. His old Invesco Income fund has fared similarly badly since he left it.

Exactly, Barnett at Invesco has a similar approach, and Income and High Income are now also in the dog funds. Apart from their liking for tobacco dividends, surely they cannot both have been in the same start-ups and small companies??

I gave Woodford a reasonable chance but sold up at 3 years and some more, when a quite reasonable 30% up but flatlining, because it became apparent he could never recover his 5 year figure to first quartile. I sold Invesco High Income a couple of years before selling Woodford. Evenlode has been my UK Income choice since.