Woodford Concerns

snowqueen555

A few years ago I was close to investing, glad I didn't as the fees put me off. It is crazy how Hargreaves Lansdown heavily promoted this fund on their website, I had read somewhere that HL accounts for a huge percent of investment.

Brian65

snowqueen555 wrote: »

It is crazy how Hargreaves Lansdown heavily promoted this fund on their website

I wouldn't say 'crazy' because HL were following a policy that has given them their enviable profit margins of about 64%, way above their more responsible competitors, and made them vast amounts of money in the past. Its just that this time their luck ran out.
Reckless, Irresponsible, Unprofessional. But not Crazy?

dividendhero

Brian65 wrote: »

I wouldn't say 'crazy' because HL were following a policy that has given them their enviable profit margins of about 64%, way above their more responsible competitors, and made them vast amounts of money in the past. Its just that this time their luck ran out.
Reckless, Irresponsible, Unprofessional. But not Crazy?

HL's policy of pushing Woodford and his funds was sensible short term, crazy long term.

Yes they did make a lot of dosh on the back of Woodford, but their name has been tarnished for a long time..and there's yet to be any sort of public enquiry, who knows what'll emerge from that!

Brian65

dividendhero wrote: »

HL's policy of pushing Woodford and his funds was sensible short term, crazy long term.

HL were taking a risk by promoting dodgy funds that were a nice little earner for them. Their luck could just as well have run out in the short term, as it did in the long term.

Prism

snowqueen555 wrote: »

A few years ago I was close to investing, glad I didn't as the fees put me off. It is crazy how Hargreaves Lansdown heavily promoted this fund on their website, I had read somewhere that HL accounts for a huge percent of investment.

Although promoting and fees come have some effect on active fund selection they should not be the primary driver of anyone's eventual choice. Lots more detail to look into such as manager style, past performance during downturns, volatility, stock selections etc. After doing that I would suggest most people would have avoided Woodford funds for numerous reasons.

barnstar2077

Brian65 wrote: »

HL were taking a risk by promoting dodgy funds that were a nice little earner for them. Their luck could just as well have run out in the short term, as it did in the long term.

Don't you think that HL could have just picked a different fund to put in their wealth 50 and still made money? Obviously they dropped the ball, but HL don't have any reason to intentionally support an endeavour that would see it's customers upset. And even if they did have a financial incentive in the short term, the bad press would still make it not worth it. HL weren't the only people who hung around expecting things to pick up again.

AnotherJoe

Brian65 wrote: »

HL were taking a risk by promoting dodgy funds that were a nice little earner for them. Their luck could just as well have run out in the short term, as it did in the long term.

Many people didn't think they were dodgy, many continued to have faith well after they should have bailed, (and "people" includes brokers not just the average punter, plenty of stories of them buying more as W's funds fell) its more a combination of incompetence, and face-saving in that I"m sure they thought they would come good and how embarrassing would it be to take it off the list, have a lot of their investors take their money out,and then see it rise again.


Bottom line is that their top [STRIKE]50[/STRIKE]49 (used to be 150 didnt it?) is a busted flush. Whilst you might think they would quietly drop it, I'm sure it helps their income by encouraging those who cant make a choice from all the investments and are hesitating "analysis paralysis" , to get on and spend their money.

AnotherJoe

I wonder, if WPCT closes under 40 for a few days, might it then continue to fall to the low to mid 30's? The back of my fag packet says there's 30-35p "real" value in it, I'm sure some of the cleverer analysts out there (including the shorters) have done some detailed analysis. If it hits 25p i might buy.
I also wonder just how low it has to fall for them to kick Woodford out? Or can they just not find anyone to take this poisoned chalice?

You'd think that Woodford going would give it a 10% bump (albeit probably a dead cat bounce)

MarkCarnage

Thrugelmir wrote: »

Banks and insurers are hardly cyclical. If anything rather boring.

Jeez, are you serious?
RBS, Northern Rock equity holders to name but two might disagree with you....yes, capital adequacy rules have tightened post 2008, and depositors and bond holders are probably in a better place, but equity holders??

Some financials are pretty boring yes, but usually people like payment service providers. Banks still leverage the equity to make money.

Brian65

barnstar2077 wrote: »

Don't you think that HL could have just picked a different fund to put in their wealth 50 and still made money? .

Depends whether they got as much in kickbacks as they got from Woodford.