Woodford Equity Income

[Deleted User]

I've got WoodFordEquity Income was well, holding it since January 2017, really dog performer. Right now it's -20% in value and -13% if I include dividends received. I will hold it for a while longer I think, as I don't want to get hit with a loss.

cogito

pioruns wrote: »

I've got WoodFordEquity Income was well, holding it since January 2017, really dog performer. Right now it's -20% in value and -13% if I include dividends received. I will hold it for a while longer I think, as I don't want to get hit with a loss.

If it's 20% down in value, that means you need a 25% increase just to get back to your starting point. Woodford has stated that he will dispose of his unlisted stocks before the end of the year. The problem with unlisted stocks is that they are much easier to buy than to sell and he may have to dump them at any price just to get rid of them.

His other problem is that he is having to sell the stocks for which there is a ready market just to meet redemptions which are running at well over £100m per month.

If you think that in these circumstances you will see a 25% increase in the near future, I congratulate you on your optimism.

AnotherJoe

pioruns wrote: »

I've got WoodFordEquity Income was well, holding it since January 2017, really dog performer. Right now it's -20% in value and -13% if I include dividends received. I will hold it for a while longer I think, as I don't want to get hit with a loss.

You've already incurred the loss, albeit on paper.
Either you think its going to rise from now, indeed you'd buy it if you didn't own it, or you think its a dog and unlikely to move much in which case replace it with something else you think will do better.

[Deleted User]

Yeah you're right. Active managers have only one shot, once winning streak is finished their carriers have permanent mark on them or could be done for good, together with the fund. especially if this is high profile person, like Mr Woodford. I don't anticipate return to stellar gains on this one, I might as well sell it!
I have very tiny portion of my wealth invested in his fund, so no big deal. I wasn't particularly sure if he would be a good bet when I purchasing his fund 2 years ago, hence little amount.

And your calculations are not 100% accurate - I am -20.05% in capital, but I received 6.81% in dividends already (not reinvested, cashed out), so I am at -13.25%. I need his fund to gain 16.6% to breakeven.

bowlhead99

RobStaffs wrote: »

I have been downsizing my investment in this fund for some time. I have now come to the conclusion to pull out all together and switch to another fund/s. I have around £16k to get rid of but I want to spread it over a range of funds.

pioruns wrote: »

I have very tiny portion of my wealth invested in his fund, so no big deal. I wasn't particularly sure if he would be a good bet when I purchasing his fund 2 years ago, hence little amount.

I need his fund to gain 16.6% to breakeven.

When I started to reply (before you edited your post to say 'a tiny portion'), you had written that it was only 0.042% of your wealth; but I'm guessing that was a typo - as if .04% of your wealth was £16k, your overall wealth would be about £40 million and you surely wouldn't be asking for advice on a random fund to add to a portfolio for a few thousand pounds

But if it's a very tiny portion of your wealth, no point putting your investment plans on hold, waiting around for this specific tiny portion of your wealth to go up by 16%. Either it is more likely than all the other things you could hold to go up by 16%, in which case it is a good fund to hold, or it is no more likely than the other things you could hold to go up by 16%, in which case dump it tomorrow and focus on building a portfolio of funds that meet your objectives.

[Deleted User]

Haha I am not quite there yet.
Thanks for all previous posts, as always invaluable knowledge and thoughts here on these forums.:beer:
And it was OP RobStaffs who said he have 16k in this fund, I merely shared my thought on same fund we are invested in.

talexuser

pioruns wrote: »

I don't want to get hit with a loss.

One of the mistakes of investing. I dumped Woodford about a year or so ago. The ?long? time to get back to where you were is losing growth in something that could perform better. Have an idea of how long you give a fund or sector to turn round and how low it goes before you bail out, then stick to that strategy. If not, get trackers and forget about performance.

bostonerimus

talexuser wrote: »

One of the mistakes of investing. I dumped Woodford about a year or so ago. The ?long? time to get back to where you were is losing growth in something that could perform better. Have an idea of how long you give a fund or sector to turn round and how low it goes before you bail out, then stick to that strategy. If not, get trackers and forget about performance.

This isn't just a question/strategy for the losers. People who own Fundsmith, or any successful fund, should be asking themselves when they want to bank some profits. Are they rebalancing or holding? And what will they do if Fundsmith falls by 20%?

Prism

bostonerimus wrote: »

This isn't just a question/strategy for the losers. People who own Fundsmith, or any successful fund, should be asking themselves when they want to bank some profits. Are they rebalancing or holding? And what will they do if Fundsmith falls by 20%?

Very different styles Woodford and Fundsmith so for me consideration would come when either that style is proving not to work or I believe that another fund is likely to do better. The first is hard to commit to admitedly (partly why Woodfrod funds are still so popular). The second reason is mainly guesswork.

So if I take Fundsmith for example, one of the main reasons that I hold it is to fall less than other equity funds during a downturn or crash. Now whether this actually happens I shall have to wait and see (and by that point its a bit late), but if it doesn't do what it says on the tin I shall have to consider what to do next time around. During the ittle bursts of volatility over the last year or two has down its job. It didn't exist during the last serious crash. After any such crash I would likely look for something a bit more aggresive to capture any growth surge (to run side by side with not replace), but almost impossible to time.

To get back to Woodford, its a really hard style to pull off consistently. Always looking for value stocks and sectors, buying at the right time, selling at the right time - exhausting! If you look back at Woodfords performance over the years its generally pretty poor with all the good stuff coming over a few small time periods. Thats exactly what I would expect for this kind of value investing. He has made some good calls (no tech during 2000, selling the banks just before the financial crisis etc) but how many times can that happen while not making a bunch of bad calls - feels too much like gambling to me.

I prefer a bit of consistency, in line pretty much with the index, while hopefully out performing it a little.

cogito

bostonerimus wrote: »

This isn't just a question/strategy for the losers. People who own Fundsmith, or any successful fund, should be asking themselves when they want to bank some profits. Are they rebalancing or holding? And what will they do if Fundsmith falls by 20%?

No it’s not. The only question they should be asking themselves is would they still buy at today's price. In the case of Fundsmith, the answer is 'yes'. In the case of Woodford, it's 'no'.