Woodford Concerns

redux

Sailtheworld wrote: »

OK. I'll change the analogy. Active funds, in the main, are for people who like paying a bit more for the same thing like people who buy bottled water. Cue argument about taste, chlorine, minerals etc.



You've expressed that better than I did. In an awful lot of cases (most?) an active fund is nothing more than fancy marketing of white label wrappers.

Scottish Widows pick up a big chunk of workplace pension business and have at least a hundred 'different' funds. They even have the same names except for A, B, C, D and Series 1 - 4 etc. Managed fund this, cautiously optimistic fund that - it's BS. All strangely exactly tracking World / UK markets. There's a cap on what they charge but it's still more than double what you'd pay for a proper tracker.

Nothing wrong with using experts but some of this is like looking for a central heating installer but choosing to pay a bit more because they've got a blue van.

Why are you searching amongst a series of irrelevant metaphors?

Why are you trying to have an argument about active versus passive funds on a thread where this isn't relevant either?

Woodford wasn't running a closet tracker on any of his funds or trusts, and the difference in performance is not due to his firm's fees, but his stock selection choices. What you are saying just doesn't belong to this context.

Sailtheworld

redux wrote: »

Why are you searching amongst a series of irrelevant metaphors?

I thought it was funny how an analogy about petrol was seized upon so I added the one about blue vans for fun - sorry.

redux wrote: »

Why are you trying to have an argument about active versus passive funds on a thread where this isn't relevant either?

Woodford wasn't running a closet tracker on any of his funds or trusts, and the difference in performance is not due to his firm's fees, but his stock selection choices. What you are saying just doesn't belong to this context.

Because I think this could be a valuable wake-up call for the sad faced people in the Daily Mail and on TV. They wanted passive risk and the chance of super duper special situations endorsed by Brad Pitt returns. The fund industry is all too willing to sell them the dream.

bowlhead99

Sailtheworld wrote: »

Because I think this could be a valuable wake-up call for the sad faced people in the Daily Mail and on TV. They wanted passive risk and the chance of super duper special situations endorsed by Brad Pitt returns.

It does appear that they got what they wished for. The opportunity to sit back passively while a contrarian investment manager did all the investment selection and occasionally exposed them to a holding company to which a celebrity had made a philanthropic contribution.

Unfortunately it didn't end in a positive result.

itwasntme001

bowlhead99 wrote: »

Unfortunately it didn't end in a positive result.

Now that is an understatement!

bowlhead99

itwasntme001 wrote: »

Now that is an understatement!

Well, I'm not trying to make a sensationalist headline for a tabloid, so best to just be factual

Sailtheworld

bowlhead99 wrote: »

Unfortunately it didn't end in a positive result.

Quite, the result was somewhat sub-optimal.

Still WPCT up by 25% today which I'm sure will lead to it appearing on an irony free best buy table in the Daily Mail.

iglad

Sailtheworld wrote: »

Quite, the result was somewhat sub-optimal.

Still WPCT up by 25% today which I'm sure will lead to it appearing on an irony free best buy table in the Daily Mail.

No it'll be there share tip at the weekend!!

bowlhead99

Sailtheworld wrote: »

Still WPCT up by 25% today which I'm sure will lead to it appearing on an irony free best buy table in the Daily Mail.

I see Motley Fool UK are straight in there with
"Time to buy Woodford (WPCT) after 30% share price surge?"

I won't spoil the insightful commentary for you but they conclude:

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A Growth Gem
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What! Hold the phones, it turns out the clickbait headline was only to tease you towards getting an absolutely free report for something else, which will tease you towards getting an absolutely not free report for something else!

Such uncommon behaviour from that site...

Brian65

Brian65 wrote: »

Up 27%.
Can't see why - It was already known someone else would be taking it over
So whats new?

No Answers?
Alan Brierley, an analyst at Investec, cautioned that despite the euphoric reaction, “we see no quick fix here”. He added “we expect to see more gremlins before any unicorns, while a high level of retail investors is likely to contribute to high levels of share price volatility”.

bowlhead99

Brian65 wrote: »

Up 27%.
Can't see why - It was already known someone else would be taking it over
So whats new

No Answers?”

They said they intended to run it as a going concern with a new and not unreasonable fee structure. An alternative approach would have been to say as others on this thread have implied: none of these assets have any real value, no point continuing, let's just dump the lot and try to get 10p for it as we wind up forever.

If you hope the assets are worth 50p, but don't know if the board really have any credible plans to bring someone in to run it and fear they may get dumped for 10p, perhaps the price gets down to 30p as was the case on Wednesday.

When it's then announced that there was a large asset manager with experience of public listed and private assets who is going to take it over and not plan to quickly dump everything for 10p, the share price will probably bounce upwards.

The Investec guy is right that there is no quick fix. And there is still a large overhang of supply from WEIF as a forced seller needing to dump tens of millions of stock, which it won't want to dump at 50% NAV discount so could be a protracted process. So, nothing is 'fixed' yet. But share prices don't exclusively move based on a company achieving an end goal. They move on sentiment, and getting heads of terms with a new manager was the first milestone needed before progress could be made.

Of course, just because a manager is willing to be appointed doesn't mean their game plan won't change when they get their feet under the table and start engaging with the portfolio businesses and lender. For Schroders to have been successful, there will have been other potential management groups who were less optimistic and unwilling to propose the same strategy or work for the same level of fees, who did not get the gig because they weren't willing to bid as competitively for it, or bid at all.