Woodford Concerns

MaxiRobriguez

Don't worry, Woodford's bought BAT, BT and IAG for the income equity fund. What could possibly go wrong with that trio of stocks?

iglad

Apparently it's all the better performing stocks outside the UK's fault. The audacity of the man!

https://www.moneyobserver.com/news/neil-woodford-blame-markets-poor-performance

Prism

iglad wrote: »

Apparently it's all the better performing stocks outside the UK's fault. The audacity of the man!

https://www.moneyobserver.com/news/neil-woodford-blame-markets-poor-performance

That type of attitude is part and parcel of being a value focused investor. You have to believe that you are right and everyone else is wrong (or doesn't know any better). I'm not convinced that approach well ever work again except for investing in small, unresearched companies - which admittedly is what he was trying to do, but in the wrong type of fund - oh and he doesn't seem especially good at it either.

MaxiRobriguez

iglad wrote: »

Apparently it's all the better performing stocks outside the UK's fault. The audacity of the man!

https://www.moneyobserver.com/news/neil-woodford-blame-markets-poor-performance

To be fair, there is some truth in this. Growth over value is evidenced in returns and the UK market has been shunned because "Brexit" with little regard to the underlying validity of the businesses comprised of the FTSE index.

There are opportunities, but I don't think Woodford can blame his funds poor performance for this when the reality is the allocation he has chosen is frankly rubbish, and punting for BT, BAT and IAG today feels like another tick in the box of hasty, ill-considered purchases with little due diligence.

AnotherJoe

The man has clearly lost the plot. Either he believes this tosh "a big boy did it and ran away" , which bodes badly for his ongoing investments, or he's a bare faced liar, which also bodes badly for his ongoing investments.
This is not going to end well.

ffacoffipawb

Moe_The_Bartender wrote: »

Update from Citywire:

Neil Woodford has lost an estimated £113 million from writedowns to Woodford Equity Income's heavy holdings in unquoted companies since the turn of the year, amid scrutiny of the valuations employed by the suspended fund.

Actually it is the investors in the fund that have lost £113 million, not Neil Woodford.

Moe_The_Bartender

Prism wrote: »

That type of attitude is part and parcel of being a value focused investor. You have to believe that you are right and everyone else is wrong (or doesn't know any better). I'm not convinced that approach well ever work again except for investing in small, unresearched companies - which admittedly is what he was trying to do, but in the wrong type of fund - oh and he doesn't seem especially good at it either.

Value investing doesn’t work any more. There’s too much information available these days for anyone to have an edge which is why funds like M&G Recovery have been going backwards and part of the reason why Woodford has come unstuck.

dividendhero

Prism wrote: »

You have to believe that you are right and everyone else is wrong (or doesn't know any better).

Likewise with regard to Industrial Heat, Woodford must think all the worlds nuclear physicists got it wrong but Woodford knows better:mad:

Scarpacci

Moe_The_Bartender wrote: »

Value investing doesn’t work any more. There’s too much information available these days for anyone to have an edge which is why funds like M&G Recovery have been going backwards and part of the reason why Woodford has come unstuck.

I need to read more of the studies on value investing as my own view is people might have conflated the higher expected returns from buying stocks when the market, overall, is cheap and buying the cheapest stocks at any moment in time.

The latter seems likely to deliver a portfolio of failing companies which remain cheap. That seems to be how Woodford ended up with so many corporate disasters (Provident, Kier, etc).

Moe_The_Bartender

Of course, something that is cheap may not be good value and vice versa.