Woodford Concerns

Freecall

talexuser wrote: »

...because Woodford's name is now toxic..

Oh, how the mighty fall.

:doh:

Brian65

cogito wrote: »

Brexit has absolutely nothing to do with it.

Are you trying to say Woodford's funds would be unaffected if we stayed in the EU?

poppy10_2

cogito wrote: »

Woodford is being criticised because of his stock selection which has resulted in many of his investors losing money...
Brexit has absolutely nothing to do with it.

It's got everything to do with it. He's betting big on UK domestically oriented stocks, that will do well in a remain or very soft brexit scenario but are set to be decimated if we move towards a harder brexit or no deal. His underperformance has been in at least partly related to this.

fun4everyone wrote: »

He did post an answer to this on his website a couple of years ago. He replied that aside from the equity in his home 100% of his money was in his own funds.

Pretty much, although he said the bulk of his worth is held in his firm and funds, rather than in his funds alone. He owns 65% of Woodford Investment Management Ltd, and earned £37 million in dividends from the company last year - a 110% dividend payout ratio, and a much better return on equity than any of his funds have produced.

Robie wrote: »

I am down 24% on Woodford. I can't decide if better to get rid and forget about the loss or wait if it *ever* recovers. Can't decide.

The best advice I've heard is to think of it this way: If you had never invested in Woodford's fund, and instead had the cash sitting in your current account right now, would you choose to put it into Woodford's funds now, or use the money for a different investment that you thought was more likely to perform well? If it's the latter, you should withdraw your money and move it elsewhere. Don't fall for the sunk cost trap - the money you've already lost is gone, what matters is what you do from here.

Thrugelmir

talexuser wrote: »

The Telegraph today (behind paywall) discusses the Patient Capital Trust. The manager of BMO Managed Portfolio has held it since launch (obviously at a loss) and has actually topped up since talking to Woodford. He reckoned Oxford Nanopore (DNA kits) will float, Atom bank might be bought out at a premium and Proton Partners (Cancer Treatments) will also float. He also says recent sales had not been at a discount to book value, and Patient Capital is a good investment because Woodford's name is now toxic and undervalued! Still too racy for me though...

Oxford Nanapore is scheduled to float within the next 12 months. As an unlisted company doesn't help fund performance though.

Strange that people prefer SMT, i.e. holding Tesla. Which is burning through cash at an alarming rate. Great ideas and technology but lacking profitability. Likely to tap shareholders for yet more funding.

cogito

poppy10 wrote: »

It's got everything to do with it. He's betting big on UK domestically oriented stocks, that will do well in a remain or very soft brexit scenario but are set to be decimated if we move towards a harder brexit or no deal. His underperformance has been in at least partly related to this.

Every single UK fund is exposed to Brexit but Woodford Equity Income is performing worse than every other.

He's bought a load of rubbish in the hope that it will pay off. He doubled his stake in Card Factory recently, for goodness sake. A business which sells on price, has no internet presence, is exposed to increases in minimum wages, high street business rates and has produced a pretty dismal set of accounts. It's utterly bonkers and yet he still insists that everyone is out of step but him.

Johnnyboy11

One classic for me was his buying into Drax Power back in 2014/15. Its Business Plan was to convert part of the existing UK coal-fired plant to burn woodchips imported by ship from Northwest Canada, so made good economic sense and also good for the environment, a win-win in Woodford's mind, apparently. Required massive Government subsidy, which was abruptly cancelled...


https://www.independent.co.uk/news/business/news/drax-loses-power-after-government-cuts-its-subsidies-a6892451.html

Brian65

cogito wrote: »

Every single UK fund is exposed to Brexit

Yes but some more than others - like those holding construction companies like Kier. People still buy stuff they need now, but won't invest in new buildings through Brexit uncertainty.

Brian65

Johnnyboy11 wrote: »

a win-win in Woodford's mind, apparently. Required massive Government subsidy, which was abruptly cancelled...

Did he not hire the right politicians?

Brian65

cogito wrote: »

He's bought a load of rubbish in the hope that it will pay off. He doubled his stake in Card Factory recently, for goodness sake. A business which sells on price, has no internet presence, is exposed to increases in minimum wages, high street business rates and has produced a pretty dismal set of accounts. It's utterly bonkers and yet he still insists that everyone is out of step but him.

This is not a recommendation because I haven't researched them. I stick to trackers because I can't be bothered anymore, and prefer to sleep easy
But from what you say it sounds like a business that could pick up if Brexit was cancelled and people felt confident to spend money again.
No internet presence suggests they have room for improvement, rather than a business that is already maxed out.
The ones that do best out of the new technology like the internet are often those who sit back and learn from other's mistakes, rather than rushing in first and making the mistakes themselves.

cogito

Brian65 wrote: »

This is not a recommendation because I haven't researched them. I stick to trackers because I can't be bothered anymore, and prefer to sleep easy
But from what you say it sounds like a business that could pick up if Brexit was cancelled and people felt confident to spend money again.
No internet presence suggests they have room for improvement, rather than a business that is already maxed out.
The ones that do best out of the new technology like the internet are often those who sit back and learn from other's mistakes, rather than rushing in first and making the mistakes themselves.

Why would cancellation of Brexit affect anything that Card Factory do? I can’t think of a business that’s less likely to be affected by political events. People will still send birthday cards.

The share price has halved in the past three years, EPS has also fallen three years running and gearing is 60%. The latest report said that sales held up despite falling footfall which, in the absence of an internet presence, is crucial to the business. If you can make a case for investing in such a business, I'd be glad to hear it.