Woodford Concerns

Scarpacci

To avoid any impression that Terry Smith and Nick Train get undue adulation around here while Neil Woodford is roundly pilloried, it might be worth noting that in September that the [gated] Woodford Equity Income Fund (-1.5%) fell less than both Fundsmith (-3.2%) and Lindsell Train Global (-2.9%).

Needless to say, a month isn't a very long time and it hardly makes up for WEIF's longer-term performance. Still, it's interesting to note the move in the market last month away the global growth stocks and defensives into less highly-valued areas. Exactly the sort of thing Neil Woodford has been waiting for.

But with the economic data out of Asia, Europe still weakening and now with poor manufacturing data in America, I personally can't see the attraction of the more cyclical stocks. But, for a month at least, people seemed keener on them.

talexuser

Questor share tipper in the Borisgraph today says sell Patient Capital, crystalising a 54% loss on their buy recommendation at 93p in 2017. It says some professional investors say they may fancy a punt if the price gets to 30p.

It says buy Syncona instead which has fallen a third from its high point.

iglad

Scarpacci wrote: »

To avoid any impression that Terry Smith and Nick Train get undue adulation around here while Neil Woodford is roundly pilloried, it might be worth noting that in September that the [gated] Woodford Equity Income Fund (-1.5%) fell less than both Fundsmith (-3.2%) and Lindsell Train Global (-2.9%).

Needless to say, a month isn't a very long time and it hardly makes up for WEIF's longer-term performance. Still, it's interesting to note the move in the market last month away the global growth stocks and defensives into less highly-valued areas. Exactly the sort of thing Neil Woodford has been waiting for.

But with the economic data out of Asia, Europe still weakening and now with poor manufacturing data in America, I personally can't see the attraction of the more cyclical stocks. But, for a month at least, people seemed keener on them.

It's not about adulation, it's about getting the job done which Terry, Nick and Michael have done handsomely in these volatile times.

iglad

coastline wrote: »

Buying the dips. LLOY, LGEN, RBS and BT, BATS recently. Low forward P/E values and some in single figures. Juicy dividends thrown in. Look at the charts in the links.

https://citywire.co.uk/funds-insider/news/woodford-buys-lloyds-rbs-and-legal-and-general-in-ftse-100-spree/a1275004

https://www.share.com/investments/shares/140/legal-and-general-share-price

https://www.share.com/investments/shares/203/royal-bank-of-scotland-share-price

https://www.share.com/investments/shares/183/lloyds-banking-share-price

Theses are shares he should have held onto however he's getting some bargain prices but it's not like they gain in value however the dividend will be decent. I don't think the Lloyds share price has changed in the past 10 years or so.

AnotherJoe

Whats the thinking behind buying more shares if he will have to sell again to raise money in December when the gate opens - unless of course theres no intention of opening in December and instead the plan is to strand people in WEIF for a much longer period and hope a rise in values by say mid next year means fewer will wish to bail out and he can brag he's turned the corner?



If he was opening in December its obvious they would need cash not shares and it makes no sense to hold shares for a few months when you need cash, they could fall in that time - oh they have.



Much of what he bought this summer (BAT, IAG, BT) must be down since then.

So, a very risky strategy.

Chtuzpah squared.

bowlhead99

Seems if he is running an investment fund he should be holding investments rather than cash.

While he will intend the fund to have cash on hand and very liquid investments to meet redemptions once redemptions are allowed, he doesn't actually need cash now, - and he intends to dispose of other less liquid holdings which would raise cash balances, prior to reopening; so the cash he has currently available could be invested and form part of whatever longer term portfolio he intends to keep on.

If you are right in your previous assessment that it never properly reopens and is simply wound up, there won't be a 'longer term portfolio'. But if that's six months to a year away, it's not appropriate for an equity fund to be wholly or substantially in cash for that length of time.

Aretnap

It's an equities fund, not a cash fund. If he was holding large piles of cash, he would be straying from the fund's remit (again).

Provided the shares he's buying are sufficiently liquid (eg BAT, IAG, BT) there will be no issues with selling them in December should there be a mass exit. There's no need to stockpile cash if your shares are liquid enough that you can generate enough cash to meet expected redemptions in a few hours.

Yes the shares could rise or fall in price between now and December, but that's sort of the point of an equities fund. He shouldn't be changing the fund's whole focus to suit a subset of investors who might be thinking about cashing out soon.

I'm not offering a prediction as to whether the fund will actually reopen in December, but if that is plan, then filling it up with liquid FTSE100 companies (as opposed to either cash or illiquid equities) is exactly what he should be doing.

cogito

It appears that WEIF has now lost 19.4% of investors' money since the fund was gated, placing it at 2759 of 2760 UK based funds over the period.

talexuser

cogito wrote: »

placing it at 2759 of 2760 UK based funds over the period.

So Woodford can take comfort that someone else has done worse! :rotfl:

AnotherJoe

Fair points re holding investments so just the question why he bought a load that have gone down in value since he bought them. D