Woodford Concerns

itwasntme001

I think it should be pretty clear by now that Woodford was not just a fund manage that under-performed, he seriously under-performed and very recklessly at that. Given he knew that he ran an open ended fund, he should have had liquidity risk at the forefront of all his investment decisions. So to Bowlhead's comment about Woodford still doing ok from Purplebricks - Bowlhead said so himself that Woodford could not sell as it would cause the share price to drop significantly. Clearly this is a liquidity risk when Woodford bought at IPO and clearly he should have realized at some point he will have to sell in his OPEN-ENDED FUND!! Its more then a mistake - its complete and utter stupidity.


I did hold Woodford income but sold last year due to underperformance. Granted i should have realised earlier his "income" fund was anything but, and that was entirely my fault due to laziness. However i did invest most of this cash in a fund that has outperformed and also some in a single stock that has more then trebled since so i have more then made up for the losses and lost opportunity from investing in Woodford in the first place.


As for the debate about active managers vs passive - 10 years of outperformance is great and not to be looked down upon but i suspect many (like me - i am in my mid-30s) have invested for much longer time horizon and i still do worry if the likes of Fundsmith will end up under-performing. It is a risk that is always present - fund manager risk. A lot of things have gone right for Fundsmith to have outperformed - crash in sterling, flight to defensive stocks, US outperforming. The true test is over many market cycles and economic conditions. So i would not like to be "all-in" with one manager, nor would i want everything in active funds. This is why i have a mix of about 50% passive and the rest active (including some single stocks i own as well).

Sailtheworld

AnotherJoe wrote: »

I think you give Woodford far too much credit by treating him as if he's just another underperforming mediocre fund manager.
There are many such.

Woodford has made them look like superstars.
Its not just that one of his funds is bad. Its not like Terry Smith where one fund made not as good returns as could have done but the others are great. Heck Woodford would probably eat one of his horses if he could say "sorry i only made 23%".
Every single one of Woodfords funds is at the bottom of its peer ranking and by a fair margin. Thats not random chance or management charges.

It's as if an article of faith is being challenged if it's suggested that picking a star manager ahead of time is anything but a doddle. Woodford proves it in spades but it simply must not be accepted. The disciples rally around 'yes you can still pick star managers, you always could - Neil just went rogue - it's not your fault'.

Prism

Sailtheworld wrote: »

It's as if an article of faith is being challenged if it's suggested that picking a star manager ahead of time is anything but a doddle. Woodford proves it in spades but it simply must not be accepted. The disciples rally around 'yes you can still pick star managers, you always could - Neil just went rogue - it's not your fault'.

I am of the opinion that most who lost money through Woodfords funds would accept full responsibility for it. Some won't of course but they are wrong. For one thing, Woodford published every single holding in every fund on the website. It was completely transparent. Nobody can really complain that they thought they had some sort of 'safe hands' reliable income fund rather than the nuts small cap, unquoted illiquid fund that they actually had.

iglad

Prism wrote: »

I am of the opinion that most who lost money through Woodfords funds would accept full responsibility for it. Some won't of course but they are wrong. For one thing, Woodford published every single holding in every fund on the website. It was completely transparent. Nobody can really complain that they thought they had some sort of 'safe hands' reliable income fund rather than the nuts small cap, unquoted illiquid fund that they actually had.

You know that some won't accept any responsibility as they didn't know what they were actually putting their money onto. A quick look at the Daily Mail money pages will have the sad eyed pensioners who's 'savings' are trapped in Wooford's funds as they can no longer access their 'savings' to pay for a 2 week holiday in Benidorm!!

AnotherJoe

Sailtheworld wrote: »

It's as if an article of faith is being challenged if it's suggested that picking a star manager ahead of time is anything but a doddle. Woodford proves it in spades but it simply must not be accepted. The disciples rally around 'yes you can still pick star managers, you always could - Neil just went rogue - it's not your fault'.

Strawman arguments seem to be your specialty

Who here said that picking star fund managers was a doddle??
Picking rubbish fund managers, yes that is closer to a doddle. If they have a good track record, then look at if they move away from what they used to do, when they were a star, to something else entirely.

I wont reiterate the points but its clear thats what Woodford did, and in spades, and he did indeed "go rogue".
There are two entirely different points here i think you've conflated into one.
Q1. Can you pick great fund managers or even, is there such a thing as a great fund manager or is it just luck?
Q2. Did NW become a bad fund manager or was he just unlucky because no one can be a great fund manager (that seems to be your argument, maybe its not though if it isnt I"m not sure what it is)

It seems clear to me that even if you cannot be a great fund manager, you can certainly be a terrible one.

And thats what NW seems to have turned into after being a great one. It may even have been that he's always been an awful fund manager but this was masked when he was at Invesco since the managers there wouldn't let him buy companies that were too risky or were out and out scams.

AnotherJoe

Prism wrote: »

I am of the opinion that most who lost money through Woodfords funds would accept full responsibility for it. Some won't of course but they are wrong. For one thing, Woodford published every single holding in every fund on the website. It was completely transparent. Nobody can really complain that they thought they had some sort of 'safe hands' reliable income fund rather than the nuts small cap, unquoted illiquid fund that they actually had.

To be fair to them, I think there's a large demographic of people who are clueless about all that stuff and leave it to their FAs to guide them.
Those who need opprobrium are those FAs who certainly should have seen and understood that and exited their clients from Woodfords funds . I would go so far as to say that any IFA who didn't get their clients out by end last year is highly suspect and you should move. It's not as if its come out of the blue there have been so many warning signs.

Malthusian

AnotherJoe wrote: »

And thats what NW seems to have turned into after being a great one. It may even have been that he's always been an awful fund manager but this was masked when he was at Invesco since the managers there wouldn't let him buy companies that were too risky or were out and out scams.

A shame that the geniuses behind the scenes who successfully deterred Neil Woodford from investing in cold fusion scams in the 1990s and convinced him to invest in tobacco companies instead haven't started their own fund.

Ciprico

I'm surprised P2P hasn't cropped up in this thread, wasn't he heavily involved in Funding Circle and subsequent debacle....

iglad

I was bit shocked to see that the Woodford Investment Trust was the 5th most popular Investment trust which people put their money into in August. I know it's cheap and looks like a bargain but come on now people.

https://www.moneyobserver.com/news/top-10-most-popular-investment-trusts-august-2019

coyrls

iglad wrote: »

I was bit shocked to see that the Woodford Investment Trust was the 5th most popular Investment trust which people put their money into in August. I know it's cheap and looks like a bargain but come on now people.

https://www.moneyobserver.com/news/top-10-most-popular-investment-trusts-august-2019

For every seller there has to be a buyer. The volume is no doubt being driven by sales, which in turn is driving the price down.