Woodford Concerns

bowlhead99

Moe_The_Bartender wrote: »

And Woody's view on the winding up:

“This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income Fund investors.”

Speechless.

Some people will be speechless that Woodford thinks he should have been allowed to continue with the repositioning of the fund and the exit strategy for the unquoteds.

Others will be speechless that two third party groups with limited practical motivation to realise proceeds are going to come in and take over the firesale at this point.

Yes I know you and Joe will say, well a blind chimp couldn't do any worse hahaha... but I would have been interested to see how his repositioning fund would have navigated the next few months of Brexit shenanigans vs the BlackRock tracker it will now be.

Moe_The_Bartender wrote: »

And WPCT is down nearly 8 per cent today. Presumably because the unlisted stuff will finally have to be valued. I bet they can't give IH away.

Presumably because WEIF owns close to 10% of WPCT and will be a forced seller of it over the coming months.

FWIW, in the case of common unlisted holdings between the two vehicles - if unlisted stuff held by WEIF is sold at a clearly distressed price which represents less than could be achieved in a longer timescale, WPCT doesn't actually need to value its own holdings at such a price. It's possible that some investments would be exited at the same time, some kept and marked to the valuation, and others kept and marked at a higher valuation.

Once the majority of the listed stuff is exited and cash returned, may be interesting to see to what extent the people assisting in the sale of WEIF's unquoteds are able to wait for a better price rather than dump and return cash ASAP. Not thinking here of e.g. IH which WPCT Investors are perhaps currently valuing at practically nothing (reflected in the 50% discount to NAV for the trust as a whole) but perhaps other things that might have been getting to pre-IPO stage in future quarters.

[Deleted User]

Like so much financial advice, Hargreaves Lansdown recommended a product that played into their own interests.

Karatekid

I am down 5K atm. Absolutely gutted

itwasntme001

Did woodford invest his money into the fund? If he did i think the least he should do is forfeit his investment in a way to reimburse other investors, even though it probably wont make much difference.

Sailtheworld

talexuser wrote: »

Unfortunately a lot of investors will lose confidence because of this and may pull out of the market altogether. Many of those that see the sense in staying may well come to that same conclusion. Do your own research, read around about the fund and its contents, if not, stick to trackers.

I doubt it. The financial industry will be working to try and convince the punters they really can pick successful fund managers ahead of time. Not too difficult really given it's an industry driven by success bias and punters who have a history of suspending disbelief.

Woodford is an extreme case but give it a few weeks and people will be back to paying handsomely to invest in the next flavour of the month.

bowlhead99

Karatekid wrote: »

I am down 5K atm. Absolutely gutted

Ouch - combined with your other thread, this hasn't been your lucky year.

Still, the most expensive mistakes are often the ones from which we learn the most.

Rheumatoid

talexuser wrote: »

Unfortunately a lot of investors will lose confidence because of this and may pull out of the market altogether. Many of those that see the sense in staying may well come to that same conclusion. Do your own research, read around about the fund and its contents, if not, stick to trackers.

I was already a fan of trackers but this has made me wary of managed funds and my ability to identify when things might be going wrong. I don't have many but may well shift more in to trackers.

Thrugelmir

Sailtheworld wrote: »

Woodford is an extreme case but give it a few weeks and people will be back to paying handsomely to invest in the next flavour of the month.

Some investors will already be chasing the end of the rainbow. Herd mentality determines that. As sure as the sun rises. There'll be another train wreck.

Sailtheworld

Thrugelmir wrote: »

Some investors will already be chasing the end of the rainbow. Herd mentality determines that. As sure as the sun rises. There'll be another train wreck.

Not only do I agree but I'd like to congratulate you on managing to fit so many metaphors into such a short post.

Thrugelmir

talexuser wrote: »

Unfortunately a lot of investors will lose confidence because of this and may pull out of the market altogether. Many of those that see the sense in staying may well come to that same conclusion. Do your own research, read around about the fund and its contents, if not, stick to trackers.

The whole episode illustrates the danger of investing in open ended funds. Like a run on a bank, i.e. Northern Rock. Investors pulling out their money at the some time. Undermines the value of the underlying assets held. Book value has no bearing. It's down to what one of the circling vultures will offer you. Market makers being under no obligation to take any large amount of stock off the funds hands in a single transaction either.