Woodford Concerns

bowlhead99

itwasntme001 wrote: »

With WPCT we are at all time highs in the stock market with no crisis and if you do some research into some of the companies in the fund, many are simply valued way too high meaning the NAV discount is not really much (or not as much) of a discount.

As there's limited information in this thread - to save us doing the 'some research' that would be necessary, please can you tell us more of the detail about the correct values for the 'way too high' overvalued companies?

You mention there are 'many' of them that are 'simply valued way too high', so other than the 4p in Industrial Heat, perhaps you could list, say, the ten next most overvalued based on your analysis of the current condition and business plans of those businesses, and your knowledge of what they are currently valued at, within the 63.5p declared NAV ?

AnotherJoe

My approach is more basic - they* are valuing something at tens of millions of pounds when it's clearly literally valueless, indeed even worse they were duped.
Therefore, why would you have any confidence that the rest is worth anything? Maybe they've been "duped" into believing what the companies have said about the efficacy of their treatments ? Then BenAI** and their promises/projections/fairy tales.
And as confirmation of that and it's not just a one-off aberration, there have been many previous recent examples of financial ineptitude - putting money into Sphere just three months before it collapsed, huge sums of money potentially due to Rutherford (which unfortunately might not be profitable though you'd think there's some value in it if even it collapses. And many many overnight halvings and more of valuations. And an outstanding loan of, IIRC, £117m - where's the money coming from to service that ?

*Link
** A company that doesn't have a "moat" to protect it, it is quite possible a better option could come about and make it worthless overnight.

itwasntme001

bowlhead99 wrote: »

As there's limited information in this thread - to save us doing the 'some research' that would be necessary, please can you tell us more of the detail about the correct values for the 'way too high' overvalued companies?

You mention there are 'many' of them that are 'simply valued way too high', so other than the 4p in Industrial Heat, perhaps you could list, say, the ten next most overvalued based on your analysis of the current condition and business plans of those businesses, and your knowledge of what they are currently valued at, within the 63.5p declared NAV ?

Lets take the top holding - Benevolent - which makes up 10% of the trust. Loss making AI-pharma/biotech company that is loss making to date. Nothing proven in terms of technology that helps anyone. Nothing as far as i can see on how it plans to become profitable, how the technology will be monetized, what the competition is, what margins will be, how much more funding it requires. I have not seen any information on this on their website.


So the question is not why do i think it is valued below the NAV that is being reported - because any valuation (whether explicit or implicit based on for example decisions whether to buy or sell) is going to be subjective to some extent (yours and mine). But instead why is it valued at $2bn in the first place? When i can buy so many other companies that people can understand and place some sort of safety of margin on. With Benevolent, you have no idea if it will even be profitable, no provable product, no moat, no nada.


Here is a short article written by a medical chemist (so someone who is presumably an expert pharma), who basically says no amount of AI will bring about the key understanding we need about disease processes, cell biology etc that is needed to develop more effective drugs that Benevolent claims to have the ability to do.


https://blogs.sciencemag.org/pipeline/archives/2018/04/23/benevolentai-worth-two-billion

itwasntme001

And just to prove my point in the above post, the valuation is in fact $1bn now and not $2bn (last year). It just goes to show that valuations for these types of companies have a very significant room for error given it just is so subjective. Until i can see some sort of provable technology exists that can be monetized, i value this company at zero.

dividendhero

Thrugelmir wrote: »

I bought F&C Enterprise trust (now morphed into ICG Enterprise Trust) when it launched in 1981...........

Not the greatest of investments. Though the return has been positive.

IIRC ICGT has cositently beaten the FTSE100 for years ??

Thrugelmir

dividendhero wrote: »

IIRC ICGT has cositently beaten the FTSE100 for years ??

With dividend income reinvested?

dividendhero

Thrugelmir wrote: »

With dividend income reinvested?

The ICGT annual report makes interesting reading, yes they do stress the dividends re-invested angle - but its long term performance does seem index beating

For example, this part is interesting...

An investment in ICG Enterprise made
on the year end date in any of the last
20 years would have outperformed the
FTSE All-Share Index (Total Return)
if still held on 31 January 2019

Thrugelmir

dividendhero wrote: »

The ICGT annual report makes interesting reading, yes they do stress the dividends re-invested angle - but its long term performance does seem index beating

For example, this part is interesting...

An investment in ICG Enterprise made
on the year end date in any of the last
20 years would have outperformed the
FTSE All-Share Index (Total Return)
if still held on 31 January 2019

From inception a return of a shade just over 6% compound.

Brian65

FT report today says Woodford and his sidekick have taken close to £20 million in dividends last financal year. Taking it as dividends instead of pay reduces their tax, yet Woodford still claimed he had to secretly sell WPCT to pay his tax bill.
I hear even the human trafficers responsible for the Essex Lorry deaths have refunded their victims money.
Wonder if Woodford will show the same grace as them and refund some of his fees

Moe_The_Bartender

Brian65 wrote: »

I hear even the human trafficers responsible for the Essex Lorry deaths have refunded their victims money.

You mean they rang the newspapers to tell them? That’s the most ridiculous thing I've ever heard.